New York 03:01
London 08:01
Barcelona 09:01
Tokyo 17:01
Sydney 19:01

Trading Currency - A Summary

This report has been deactivated

Forex Markets − Afternoon Report

Mon, Sep 14 2009, 16:05 GMT
by Anna Coulling

Forex Markets Today

The dollar is recovering Monday from a sharp sell off against the euro and yen from last week, after the euro finally broke out of a four month range against the dollar in the previous trading sessions, with many forex traders now suggesting that the dollar is due for a correction. Still, it remains within those weaker ranges despite being slightly up on the day. Over the weekend, Washington imposed stiff tariffs on Chinese made tires, and in retaliation China said it would launch an anti dumping investigation into U.S sales of chicken and auto products.

The risk of protectionist policies, when economies have yet to fully recover from financial crisis, leaves commodity exporters and small open economies particularly vulnerable, as their currencies are the same that garnered support in the recent bout of risk appetite against the dollar, and in particular the Canadian dollar, Australian dollar, Swedish krone and Korean won would be principle examples. The euro traded at USD1.4558 versus the dollar in recent action, down from USD1.4587 in North American trading late Friday. Rising risk appetite last week helped push the euro to a new high for the year above USD1.46. The British pound changed hands at USD1.6553, down from USD1.6685.

Forex Markets Outlook Today

The dollar could see additional support towards the end of September as the Group of 20 summit of the largest economies approaches. Several attendees are scheduled to speak in the coming days. Some wonder whether leaders might talk about the strain a weak dollar presents their economies. EURGBP retains a firm underlying tone. More demand now expected at the 1500GMT London fix. Reported offers placed between stg0.8800/05 have so far capped topside at stg0.8803. A break of stg0.8810 to open a move on toward stg0.8825/30. Rate currently trades around stg0.8800.

The euro vs yen recovery off overnight lows at JPY131.30 extends to JPY132.45 into early NY trade, with offers ahead of JPY132.50 providing a hurdle to further upside progress. Rate currently trades back around JPY132.25. Above JPY132.50 to open a move toward JPY132.80/00. Support now seen around JPY132.00, a break below to allow for a deeper move toward JPY131.70 ahead of JPY131.30, with bids noted from this latter level, extending toward JPY131.00.

Published on Mon, Sep 14 2009, 16:05 GMT

Forex Markets − Morning Report

Mon, Sep 14 2009, 15:03 GMT
by Anna Coulling

Master The Markets

Forex Morning Report

The dollar marked a fresh multi-month low against the yen in Asia Monday, and traders said the currency is likely to fall below JPY90 this week due to growing pessimism over the outlook for the U.S. economy. The greenback fell to JPY90.18, the lowest level since Feb. 12, from JPY90.64 in New York Friday. Profit taking on the yen by funds caused the U.S. unit to recover a tad to JPY90.49 as of 0450 GMT. The euro vs dollar opened in Asia around USD1.4570, initially recovering to post session highs at USD1.4609 before reversing on general risk aversion trading following China's reaction to the weekend imposition by the US of tariffs on imported Chinese tires (China announced a probe into US dumping of auto parts and chickens into China). Weak stocks and a softening in commodity prices added to the risk off tone with sales of euro yen providing added weight to take the euro dollar to lows of USD1.4521. Rate recovered to USD1.4555 (38.2% USD1.4609/1.4521) before meeting further supply, easing back to retest earlier lows into early Europe. Rate extended lows to USD1.4515, meeting decent demand on the dip before recovering back to USD1.4540.

The UK Pound showed firm bias and rose to as high as 1.6742 in European morning, the highest level since 10th August due to U.S. dollars' broad-based weakness and better than expected PPI data (core PPI in August rose 0.2% monthly and 0.7% yearly), however, the price retreated in late U.S. session on long liquidations ahead of weekend.

The Australian dollar Monday ended the local session lower as signs of trade tensions between the U.S. and China boosted the U.S. dollar at the expense of the local currency. The high yield unit fell sharply on news China would restrict certain U.S. imports in response to a plan by U.S. President Barack Obama to place tariffs on tire imports from China.

Forex Markets Outlook

The dollar is recovering a bit Monday, giving the U.S. currency a respite from recent weakness, with the retreat in stocks rekindling its safe haven role. The euro fell against the dollar and yen as investors squared their positions, but the market's dollar bearishness means the European currency could rise again soon. It dropped to USD1.4541 from New York Friday's USD1.4582, but some said it could head back above USD1.4600. The euro also fell to JPY131.56 at 0450 GMT from JPY132.21 late Friday. The view that the U.S. economy remains weak will likely further drag down the dollar, according to many forex. Fragile financial market conditions in the U.S. means the Federal Reserve will likely have to keep interest rates low and pump funds into markets. Expectations that a worsening U.S. job market will hurt consumer spending are also spurring dollar selling. Traders said they will be watching U.S. economic data this week, such as Tuesday's retail sales for August, to judge the current state of the U.S. economy.

The euro vs yen is currently tarding around JPY131.50, from its opening level around JPY131.59, having found decent demand interest ahead of the Tokyo fix which lifted the forex rate back to JPY131.99. Exporter sales post fix pressured rate to session lows of JPY131.30 before rate edged back, meeting resistance around JPY131.70 (61.8% JPY131.99/30). Above this area and rate can edge back toward JPY132.00. Bids remain in place from around JPY131.30, strengthening toward JPY131.00 with reports of stops below. Forex traders are also wondering how the new Democratic Party of Japan administration will deal with recent yen strengthening, considering that some of its lawmakers have voiced support for a strong Japanese currency. However, a rising yen tends to weigh on exports, a key part of Japan's economy, by making Japanese products more expensive abroad.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links. I have also included details on an excellent ECN broker.

Published on Mon, Sep 14 2009, 15:03 GMT

Forex Market Analysis

Fri, Sep 11 2009, 14:04 GMT
by Anna Coulling

Master The Markets

Fundamental Forex Analysis

The dollar remains under pressure off earlier intraday lows Friday, after a flurry of strong economic numbers from China overnight gave a further lift to risk appetites. The latest Chinese data on industrial production, retail sales and lending were all beyond expectations, developments which helped the Shanghai Composite Index to rally 2.0% and the price of gold to rise back to around the USD 1,000 per ounce mark. For foreign exchange, the news also contributed to fresh multi-month U.S. dollar lows against the euro and the yen, although a pre weekend tendency toward position squaring has limited the dollar's losses and enabled it to recover modestly off its weakest levels of the day.

The yen's gains have come despite some discouraging economic developments in Japan, as the country's second quarter GDP growth was downgraded to 0.6% from 0.9%, a factor that helped to ensure that the Nikkei Index lost 0.7% on the day.

Forex Technical Analysis

The euro vs dollar continues to orbit in a narrow range around the USD1.4600 area with flows described as light, with traders suggesting that many want to participate but are either waiting for the dip or waiting for the break. Overnight high area at USD1.4628 still said to hold supply after the push higher was rebuffed, stops positioned above. Bids back at USD1.4570 with stops positioned below. Euro last at USD1.4590.

The dollar yen continues to hold near JPY91.00 area as it maintains its rebound level after seeing European hour's lows at JPY90.69 after a swath of stops were flushed on the break of JPY91.00. Rebound got an assist from vigorous dollar buying out of Tokyo, traders say, adding Japanese retail accounts to the earlier talk of semi official buys off the low. Bids expected in the JPY90.75/80 area, further down to JPY90.60 with barrier strike noted at JPY90.50 and JPY90.25, stops positioned below each. Currency market analysts believe that the yen's recent strength is less a product of fundamental developments than of factors like repatriation flows into Japan at the end of the fiscal half year there, as well as due to persistent dollar weakness as a result of the ongoing portfolio asset shift.

Most forex traders now believe the USD is really working hard at bottoming out at the current level on the USD Index - volatility has been high and official interest is actively buying. With sentiment and technical's very oversold, the USD is primed for a strong rally next week, at least to correct the oversold condition. Look for profit taking by the shorts to end the week, and today's US data may be the catalyst, making next week a very interesting one for forex anlaysis and the US dollar in particular - look for some volatile movements in the major forex pairs.

Published on Fri, Sep 11 2009, 14:04 GMT

Forex Market Analysis

Thu, Sep 3 2009, 14:37 GMT
by Anna Coulling

Master The Markets

Fundamental Forex Analysis

The euro and dollar rebounded against the yen in overnight trading, as an uptick in Chinese equities sent traders back toward riskier currencies. The European Central Bank takes center stage Thursday morning. Its governing council kept the key refinancing rate at 1.0% for the fourth successive month, so most attention will be focused on the accompanying press conference with ECB President Jean-Claude Trichet for clues to the euro zone's economic health and whether it will announce a timeline for ending its quantitative easing programs.

While the Labor Department released a report on Thursday showing a modest decrease in first-time claims for unemployment benefits in the week ended August 29th, the decrease followed an upward revision to previous week's initial jobless claims. The report showed that jobless claims edged down to 570,000 from the previous week's revised figure of 574,000. Economists had been expecting jobless claims to slip to 564,000 from the 570,000 originally reported for the previous week.

Forex Market Outlook

Analysts said the thinly traded summer currency markets remain unsure of whether to trust a global economic turnaround. Mixed economic signals have led investors to trade on risk, heading toward higher yielding currencies when stock market's rally, and seeking the safe haven dollar and yen when stock markets sink.

The euro vs dollar skidded lower again as earlier noted semi official demand gets filled, along with bids to USD1.4280 or so. Stops warned of sub USD1.4270 as intra-day longs rethink positions in still skittish markets.

The dollar vs yen continues to under perform against most other forex pairs, staying in a narrow range around JPY92.40 since the start of the US session, a recent pop higher stalling at JPY92.50 area just shy of the overnight high. Trading flows are light, an Asian hours dip to JPY91.95 sufficient to gun reported barrier strike and some nearby stops but leaving intact better stops sub JPY91.90. Offers up at JPY93.00. Dollar last at JPY92.50.

Currency investors will be paying attention to several U.S. economic reports released Thursday, including the 8:30 a.m. EDT release of weekly jobless claims, which are expected to improve, and the 10 a.m. EDT release of the Institute of Supply Management survey for non-manufacturing industry.

Looming over the market also is this weekend's meeting in London of finance ministers from the Group of 20 industrial and developing nations. Although they aren't expected to discuss currencies in particular, the market could be affected by any shifts in sentiment on the state of the global economy or any talk of strategies for exiting quantitative easing.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply followin

Published on Thu, Sep 3 2009, 14:37 GMT

Forex Market Analysis − Morning Report

Thu, Aug 20 2009, 08:34 GMT
by Anna Coulling

Master The Markets

Forex Market Analysis - Yesterday & Overnight

A rebound in Asian stock prices sent the dollar and euro higher against the yen in Asia Thursday, but the rise is likely to be limited as Japanese exporters were willing to sell the currencies to settle their accounts. The US dollar rose to JPY94.40 as of 0450 GMT from JPY94.00 in New York Wednesday, and the European unit rose to JPY134.28 from JPY133.80. Improved risk appetite on the back of firm Asian share prices led the U.S. and Asian short-term-focused hedge funds to increase their holdings of the risk-sensitive currencies, dealers said.

The euro hit a low of USD1.4084 against the dollar earlier in the day as the slide in Chinese stocks sparked anxiety over a global recovery and pushed investors away from riskier assets, but eventually rallied to USD1.4268 versus the dollar in New York afternoon as a recovery in equities and a jump in oil prices boosted investors' confidence.

The British pound suffered after the Bank of England's policy meeting on August 6 minutes revealed that Governor Mervyn King wanted a bigger increase in asset purchases. The minutes indicated that the BOE is expected to keep rates unchanged at record low of 0.5 percent for some time.

The Australian dollar was stronger in late Asian trade Thursday as an equities led recovery in risk appetite helped the higher-yielding currency regain ground lost earlier this week. The positive performance by Chinese stocks in the Asian time zone has been particularly supportive of the local unit given that it has also been the principal catalyst of Aussie dollar selling in recent weeks.

Forex Market Analysis - Outlook

The euro, the U.K. pound and the dollar are little changed against each other but all are higher against the yen. Shifts in risk sentiment will shape moves on Thursday though narrow ranges are likely to prevail. Fears are circulating that China, the linchpin for global economic recovery, may pull back some of its credit easing measures, which could undermine recent signs of a turnaround. For now, forex traders expect the dollar will remain in a week old range between JPY93.00 and JPY96.00, and the euro may stay in the recent JPY132.00 JPY136.00 band against the yen.

Analysts expect the Australian dollar to stay between USD0.8150 and USD0.8400 over the next few days with demand for dips likely to limit downside potential for the currency. Nearer term resistance is likely around the USD0.8320 level.

The euro dollar is picking up talk that Asian accounts also have sell interest lined up a little higher from where the rate is currently (USD1.4240). Forex traders suggest that the currency market looks to be a mirror of yesterday in that Europe has come in with a risk on view only to be met by decent offers which could squeeze out the early entered longs. Yesterday we saw risk off trade in early business, squeezed later.

Published on Thu, Aug 20 2009, 08:34 GMT

Forex Market Analysis − Morning Report

Tue, Aug 18 2009, 09:29 GMT
by Anna Coulling

Master The Markets

Forex Market Analysis

This morning's forex analysis starts in Japan, where the markets saw an unexpected rise in Japanese stocks in the morning session which pushed the dollar up against the yen in Asia Tuesday. However forex traders expect the greenback to resume its decline as shares began to fall in the afternoon trading session. The dollar rose to a high of JPY95.03, from JPY94.44 in New York Monday, due to improved risk appetite as the benchmark Nikkei 225 Stock Average ended the morning session up 0.4% at 10,307.41.

The Euro started falling from the open and accelerated into Europe after breaking through USD1.4100. The Market found itself short going into New York and stabilized through a rally in the euro vs yen.

The Pound took a sharp tumble against the US dollar yesterday. First, the UK released a weak housing prices report and in addition to the overnight risk aversion, the pound is being punished for the Bank of England's recent statements and moves. The bank expanded its asset purchase program, a signal the economy is still fragile, while also acknowledging that inflation will miss its target, limiting when the bank can raise rates. The pair broke a support line at its open around the USD1.65 area.

In a choppy Tuesday trading session, the Australian dollar managed to edge higher amidst further turbulence on regional equity markets, while shorter dated bond futures benefited from a renewed investor rush into safer asset classes.

Forex Fundamental Analysis

The safe haven yen is a little weaker as forex traders took a more sanguine view of the economic recovery than the pullback in stock markets was suggesting. The U.S. currency may hit JPY93.50 if the U.S. housing starts survey due at 1230 GMT turn out to be weaker than expected and therefore show that the nation's economic recovery is likely to remain slow for some time yet. The headline figure is expected to show a rise of 2.7% in July from June, according to economists.

Elsewhere, the euro rose to USD1.4105 from USD1.4085 in New York Monday due to buying by Middle Eastern investors and Japanese importers, but it may start falling soon, as the euro is often weak when investors decrease their exposure to risk sensitive assets. European stocks are expected to open modestly higher overall Tuesday, although some nervousness remains as Asian equity markets trade in the red.

Forex Technical Analysis

Pound stops above USD1.6400 targeted and triggered into early European trade on reported Russian demand, the rate lifting from around USD1.6365 to USD1.6410, pushing through earlier Asian highs at USD1.6393 (Monday European high at USD1.6398). Rate quickly drops back to USD1.6385 as profit take selling emerges after the pressured move to counter the triggered demand, along with reports of Mid East sales. Offers now seen placed around that failed level at USD1.6410, a break to open a move toward USD1.6435, with interest here said to extend toward USD1.6450.

Published on Tue, Aug 18 2009, 09:29 GMT

Forex Market Analysis

Mon, Aug 17 2009, 08:43 GMT
by Anna Coulling

Master The Markets

Forex Trading Analysis

This morning's forex analysis starts in Asia where the Euro fell to a two week low against the yen during Mondays trading session, as continued weakness in Chinese stocks and newly confirmed falls in Japanese capital investment prompted investors to sell risk sensitive currencies. The European currency fell to as low as JPY133.62, its lowest level since July 30, from JPY134.53 in New York Friday. The dollar also fell to JPY94.46 from JPY94.83. Currency dealers have recently been paying attention to moves in Chinese stock prices, with the benchmark Shanghai Composite Index falling by more than 3% at one point earlier Monday. The euro dollar pair traded to a low of USD1.4143 and a high of USD1.4194, with the pair finding support at USD1.4125 along with a resistance at USD1.4185. If the pair breach the support level on the forex chart analysis, then the next target will be USD1.4100.

The British pound is currently trading relatively steady despite choppy trading conditions. UK sterling was recently hurt by a jump in the unemployment rate along with the Bank of England indicating that rates are unlikely to be raised for some time.

The Australian dollar was weaker late Monday as the unwinding of gains in risk asset markets continued into the Asian session. The pullback in risk appetite, in what is typically a volatile month for equities markets, has supported Australian bonds futures, pushing the September three year bond futures back above 95.00.

Fundamental Forex Analysis

The euro and the dollar may extend losses against the yen today, as Friday's lukewarm U.S. economic data added to concerns that the economic recovery may take longer to arrive than had been previously anticipated. Continued risk aversion sales, prompted by the release Friday of weaker than expected US consumer confidence data, saw the euro vs dollar pressure reported stops below USD1.4130, with an eventual break extending the base to USD1.4126 before profit taking demand surfaced to provide an early cushion. However, recovery remains shallow. Support is noted between USD1.4120/15, with more toward USD1.4100 ahead of Aug 12 low at USD1.4086. Resistance remains toward USD1.4200. European stocks are expected to open in the red, with Friday's weak session on Wall Street set to weigh on sentiment despite news Monday that the world's second largest economy, Japan, pulled itself out of recession in the year's second quarter. The dollar and euro are likely to keep falling this week because investors are expected to decrease their exposure to risk sensitive assets, with the dollar yen pair likely to fall to fall to JPY93.00 this week.

While the U.K. pound is lower against the dollar and yen, some traders may look to take short term scalping traders to the long side around current levels or slightly lower, with tight stop loss points. The pound, meanwhile, is little changed against the euro. For the Pound forex chart analysis would suggest that support is seen placed at USD1.6390 and at the time of writing is extending lows to USD1.6380. Below here and the rate may ease on toward USD1.6350 ahead of USD1.6338 (Jul 30 lows). Resistance is now seen placed at USD1.6450.

Published on Mon, Aug 17 2009, 08:43 GMT

Forex Market Analysis − Forex News

Fri, Aug 14 2009, 09:47 GMT
by Anna Coulling

Master The Markets

Forex Market Analysis Overnight

For this morning's forex news analysis we start in Asia where saw the euro and dollar fall against the yen in Asia Friday as weak Chinese stocks and lower U.S. long-term interest rates prompted currency traders to sell these currencies against for the Japanese currency. Japanese exporters joined in the selling on a regular settlement day, while the dollar came under further pressure ahead of the redemption of U.S. Treasuries on August 17. With the outlook for Chinese share prices remaining grim, the euro and dollar are expected to continue heading lower against the yen. Short term foreign exchange market traders have recently grown sensitive to movements in Chinese share markets, amid concerns that weaker than expected Chinese growth may drag on a global recovery as we look at the fundamental forex analysis picture. A slumping Shanghai Composite index, down 2.4% in early afternoon trade, again triggered a sell off in risk sensitive currencies such as the euro.

Meanwhile, the dollar stood at JPY95.22 compared to JPY95.36 late Thursday in New York. The dollar had fallen against the yen overnight, after U.S. retail sales data marked a 0.1% drop in July, disappointing expectations for a 0.8% rise, and as a result sentiment remained negative in Asia.

The Euro rose to a one week high at USD1.4328 against the greenback on Thursday as the euro zone's two biggest economies unexpectedly returned to growth in the second quarter of the year. In Germany, Europe's largest economy, gross domestic product rose surprisingly by 0.3% in the second quarter. The British pound rebounded even though the UK unemployment rate jumped to 7.8 percent during the second quarter, the highest rate in 14 years, up from 7.1 percent during the first quarter.

A bullish economic outlook from the central bank sent the Australian dollar to 11 month highs in Asia Friday before renewed jitters on the Shanghai stock exchange sparked a bout of profit taking.

Forex Market Analysis - Today

The euro is under some pressure today in our forex news analysis, as the slump in the Chinese stock markets dents risk appetite more broadly in Asia. The euro vs dollar bids are seen placed between USD1.4255/50, a break below to open a deeper move toward USD1.4245/40 with further interest tucked in close behind at USD1.4235/30. Below here on the forex chart, and the rate may ease toward USD1.4220/10. Asian account offers noted at USD1.4295, with Swiss accounts sell interest seen at USD1.4315 ahead of stops placed on a break of USD1.4320.

The euro vs pound closed in NY at stg0.8618, the rate nudging up to stg0.8622 in early Asian trade (NY high stg0.8623) before easing back to stg0.8604. Rate currently trades around stg0.8618 into early Europe. Offers are seen placed from stg0.8622 through to stg0.8630, a break to open a move on toward stg0.8640/45 ahead of stg0.8650/55. Support stg0.8605/00, a break to allow for a deeper move toward stg0.8590/85 ahead of stg0.8575/70.

Forex Trading Analysis

Currency market reactions to data and other events could continue to be rather fickle for some time yet, given the still-rampant uncertainties relating to growth and also the low liquidity summer environment, according to many traders and analysts, and for the next few weeks, the US dollar will be the main driver to the principle currency pairs. Should further weakness continue and risk appetite remain strong, then it is hard to see what fundamental news is likely to shift the current balance. The US dollar no doubt holds the key, and a glance at the forex chart for the USD index reveals a very weak picture based on the forex technical anlaysis.

Published on Fri, Aug 14 2009, 09:47 GMT

Forex Analysis − Currency Trading Strategies

Thu, Aug 13 2009, 08:11 GMT
by Anna Coulling

Master The Markets

Forex Technical Analysis - Overnight Asia

Today's forex analysis in Asia, saw the euro rose against the yen and the dollar in Asia Thursday as firm Asian share markets spurred demand for the riskier euro. Overnight comments by the Federal Reserve also led to a more optimistic economic outlook among traders, nudging them to take more risks and buy the single currency. The euro's near term direction is slightly upward, with regional share markets were broadly higher. As of 0530 GMT Japan's benchmark Nikkei 225 Stock Average index was up 1.0%, while stock markets in South Korea, India and Australia also gained. Some Japanese banks sold the dollar for the yen due to redemptions of dollar denominated bonds.

The Euro tested USD1.4100 before bouncing hard on USD weakness in the US session, shrugging off the FOMC report to finish above USD1.4200. June Industrial Production fell -0.6% vs. 0.3% forecast. The euro vs yen had a wild day trading in a 3 yen range on the change in risk appetite, whilst the euro pound remained supported on GBP weakness.

The British pound was propped up by a weaker US dollar despite bearish sentiment in the UK. The Bank of England said inflation will stay below its 2 percent target as the UK economy undergoes a "slow and protracted" recovery. UK Central bank Governor Mervyn King said it is "more likely than not" that inflation will slow below 1 percent this year and unemployment reached a 14-year high. Thus, UK interest rates are expected to remain on hold for a while.

The Australian dollar reversed course Thursday, rallying as risk appetite regained lost ground while long-dated bond futures were sold. Spurring the risk buying mood in Asia was a relatively optimistic outlook from the U.S. Federal Reserve, which didn't extend it's bond buying program and said the economy's contraction is slowing.

Forex Technical Analysis - European Trading

The euro is marginally higher against the dollar, yen and UK pound this morning as short term Asian investors buy on higher risk tolerance. The euro vs dollar reported offers placed between USD1.4265/70 able to contain the early rally driven by the GDP figures, with the underlying tone remaining firm. The currency rate currently trades around USD1.4257 after touching fresh intraday highs at USD1.4268 (50% USD1.4448/1.4086). Above USD1.4270 may open a move on toward USD1.4280/85.

For the UK Pound offers are seen placed above USD1.6585 through to USD1.6600, a break here could open a move on toward USD1.6615/20 ahead of stronger level at USD1.6650. Support is now seen placed at USD1.6550, a break below USD1.6540 to open a deeper move back toward USD1.6510/00. Attention now turns to U.S. retail sales data at 1230 GMT and second quarter earnings from Wal Mart Stores Inc. later in the day to gauge whether consumption is recovering in the U.S. The euro could rise toward JPY138.00 against the Japanese yen, and USD1.4300 against the US dollar, if those figures come in better than expected, adding to the positive outlook for the U.S. economy.

European stock markets are expected to open higher Thursday, as investors react with optimism to the latest comments from the Federal Reserve about the strength of the U.S. economy, the world's largest.

You can keep up to date with all the latest forex analysis and fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links. I have also included details on an excellent ECN broker.

Published on Thu, Aug 13 2009, 08:11 GMT

Currency Markets − Morning Report

Wed, Aug 12 2009, 07:56 GMT
by Anna Coulling

Master The Markets

Currency Markets - Asian Trading Overnight

The dollar and euro extended their falls against the yen in Asia Wednesday as weaker regional share markets prompted investors to buy the safe haven Japanese currency. However, currency traders expect any further falls later in the trading day to be limited ahead of a U.S. Federal Reserve statement. Following U.S. stocks' retreat overnight, Asian equity markets slumped, with Japan's benchmark Nikkei 225 Stock Average down 1.4% and the Shanghai Composite off 2.4% in early afternoon trading. This prompted many short term focused traders to seek safety in the Japanese yen. At 0450 GMT, the dollar lost around half a yen, standing at JPY95.44 compared with JPY95.93 late Tuesday in New York.

The Euro rose to an intra day high of USD1.4186 against the dollar in late European afternoon, however, the currency pair then dipped briefly to USD1.4110 on the back of the declines in U.S. and European stock markets. German CPI decreased by 0.5% y/y in July, its first annual drop since the index was introduced. The British pound traded near this week's low at USD1.6431 against the dollar on Tuesday as investors expect that BoE Governor Mervyn King will highlight the downside risks to the U.K. economy in the inflation report due out on Wednesday.

Rising risk aversion and a stronger U.S. dollar toppled the Australian dollar in Asia trading Wednesday, while bond futures enjoyed strong gains in jittery atmospherics ahead of the Federal Reserve's monthly policy meeting later. Although the Fed isn't expected to alter interest rates, its outlook for the economy and whether it intends to extend its USD300 billion quantitative easing program will be of crucial importance for direction in both the currency and bond markets.

Currency Market Outlook

Currency traders expect the three major currencies are likely settle into narrow ranges ahead of the end of the Federal Open Market Committee monetary policy meeting later. Against the yen, the dollar is likely to stick to a JPY95.30-JPY95.80 range, as players avoid major bets. Most traders expect the FOMC to hold interest rates at their ultra low 0.00 0.25% level. Many also believe the committee will decide not to extend an unconventional program to buy Treasuries past their scheduled expiration next month. Traders have also noted a suggestion that the BOK was selling dollars to control the won's depreciation, which could prompt some sales of the euro dollar, for account balancing purposes. Stops noted on a break of USD1.4100. Further demand is seen at USD1.4085/80 ahead of USD1.4065/60, with stronger interest noted between USD1.4010/00. Resistance is noted at USD1.4150, with more between USD1.4165/70 ahead of USD1.4180/85. Currency markets expected to remain subdued ahead of tonight's FOMC announcement.

For the UK pound, a break and clear below USD1.6430 could open a deeper corrective pullback toward USD1.6405/00 ahead of USD1.6370/60. Resistance is seen at USD1.6505/15, USD1.6530/40 with stops placed on a break of USD1.6550. Attention is now on fundamental news, with the UK unemployment data due at 0830GMT, followed by the BOE Quarterly Inflation Report at 0930GMT. Sterling remains soft on expectations of a further downgrading in growth forecasts.

Published on Wed, Aug 12 2009, 07:56 GMT

Currency Markets − Morning report

Tue, Aug 11 2009, 10:14 GMT
by Anna Coulling

Master The Markets

Currency Markets - Overnight Trading Asia

The dollar and euro fell against the yen in Asia Tuesday as weak Chinese stock prices stifled players' risk appetite and prompted them to buy the safe haven Japanese currency once again. Both currencies may retrace further if European and U.S. stock prices fall later in the global day, but their fall is likely to be limited ahead of the two day Federal Open Market Committee meeting. The US dollar fell to JPY96.65 from JPY97.11 in New York Monday, and is expected to decline further if European and the U.S. shares also show poor performance later in the day with the euro also declining to JPY136.61 from JPY137.32. The Euro pivoted around the USD1.4200 price level for most of the day until the bears won out and forced the pair back to USD1.4100 . Euro yen selling capped the rebound as US stocks started to slip and sentiment shifted to profit taking. Many analysts are pulling there long euro dollar predictions given the price action over the last two days.

The British pound fell against the dollar on Monday as stock markets snapped two day gains and also due to the fallout from the Bank of England's decision last week to expand asset purchases, which sparked concerns that the worst of the U.K economy has not yet passed. A firmer U.S. dollar and weaker than expected Chinese data sent the Australian dollar to two week lows in Asia Tuesday, with further losses expected offshore, while shorter dated bond futures nudged higher. Weighing on the local currency in particular is a fundamental shift in outlook for the U.S. economy as traders bet on an imminent end to the recession there, which in turn is driving a renewed bid tone behind the U.S. dollar.

Currency Market Outlook

A revival of caution ahead of the Fed's meeting is tipping the dollar, euro and pound lower against the yen, but the dollar is still viewed as a better bet thereafter. Downside moves against the yen are likely be limited for now as currency traders are unwilling to make aggressive bets ahead of the release of the statement from the FOMC Wednesday. Analysts are suggesting that this week's meeting of the Federal Open Market Committee will be crucial for near term bond and currency market direction, as any hawkish tones from the Fed would boost the US dollar and weigh on the Australian dollar.

The euro vs dollar is reversing lower once again amid talk of stops under USD1.4100, though slippage was contained at USD1.4124, with subsequent trades then contained under USD1.4150 into the Asian afternoon. A break of USD1.4100 may expose light bids at USD1.4065/60, said to be stronger at USD1.4010/00. Offers are seen back at USD1.4150/60 in small, more significant into USD1.4200/10.

The dollar vs yen has moved lower, last at JPY96.67 vs JPY97.11 in New York Monday, mostly due to players' position adjustment ahead of the 2-day FOMC meeting starting today. The long term trend remains upward as players are somewhat less dovish on U.S. economy as recent jobs data turned out to be stronger than expected, say dealers. For now, the important psychological technical mark at JPY98.50 remains important, as moving averages on the daily charts suggest this is the tipping point. In addition many options players have also placed sell orders there as well as exporters' willingness to sell US dollar holdings there to settle accounts. If this level is breached, the dollar vs yen may rise toward the 100 price handle once again.

Published on Tue, Aug 11 2009, 10:14 GMT

Currency Markets − Aftenoon Summary

Mon, Aug 10 2009, 16:43 GMT
by Anna Coulling

Master The Markets

Currency Markets - European Trading

The euro and U.K. pound fell to session lows against the dollar early Monday, as risk aversion made its way into currency markets following a decline in European stocks. However, the euro is still slightly up against the dollar from late Friday and currencies are within narrow ranges. The European currencies benefitted from a slight rebound overnight, following a sharp sell off last Friday, on gains in Asian stocks. But as investors took profits on equities, the euro and pound dipped. Monday, the euro fell as low as USD1.4163 and the U.K. pound declined to USD1.6583. The euro also sank to session lows against the yen, JPY137.57, and Swiss franc, CHF1.5339. Last Friday, for the first time since the financial crisis gripped investors, the U.S. unit gained on positive U.S. news. The dollar was bought on interest rate expectations and economic fundamentals, something that hadn't happened since the world's major central banks began their aggressive easing campaigns. Usually, as a safe haven asset and low yielding currency, the dollar had been declining throughout the past two years against riskier, higher yielding currencies, such as the euro, when spurts of positive data boosted market sentiment - even if it is was positive U.S. data.

Currency Markets - New York Trading Session

While the U.S. economy is showing signs of healing, investor sentiment is still closely correlated to developments out of China and any possibility that easing measures there will be curtailed. Now, the market is wondering whether the dollar can maintain those gains and if it has really broken its tie to the risk averse trade. The euro dollar continues to stumble lower, marked with fresh lows near USD1.4155 amid light flows but with the dollar maintaining a slightly positive tone as traders react, in part, to a raft of euro negative scenarios painted by various technical traders. The euro vs dollar continues to find demand interest around the Friday low, extending to USD1.4150, but stops are to be building below there, down to USD1.4140.

The US dollar vs Japanese yen has rebounded to JPY97.30+ in current trading, revisiting the better levels seen at the start of the US session though falling short of the JPY97.45 rebound highs that capped the pair in European trade. The UK Pound reported demand in the USD1.6560/50 area, which again came under pressure, but this was sufficient to contain the fall as sterling trades with a heavy tone, cable losing around 1% from the Asian highs as euro sterling made a show back above stg0.8550. Technical traders highlight the next key support at USD1.6514 (50% retracement of July-August rally, while the 21-day moving average is noted ahead at USD1.6549).

Published on Mon, Aug 10 2009, 16:43 GMT

Trading Currency − A Summary

Mon, Aug 10 2009, 08:26 GMT
by Anna Coulling

Master The Markets

Currency Markets - Friday and Overnight Asia

The dollar and euro gave up some ground to the yen in Asia Monday, as investors took profits following a sharp rise in those currencies against the Japanese unit Friday, while Japanese exporters joined in the selling on a regular settlement day. However the Japanese yen, considered one of the safest currencies to buy in times of economic turmoil, may now start to decline on growing expectations of a global economic recovery. The U.S. dollar stood at JPY97.11, compared to JPY97.48 in New York late Friday, when it surged almost 2.5 yen to briefly mark a two month high of JPY97.79 on better than expected Non Farm Payroll data. The euro also declined to JPY138.03, well below the high of Friday in New York at JPY138.72, and lower than its JPY138.20 level late in that session. The euro was one of the weakest major currencies on Friday, but it has little to do with European data. Instead, the release of US non-farm payrolls triggered a surge in the US dollar, which led the euro vs dollar to break out of a tight range and fall roughly 200 pips in the trading session.

The British pound fell on the back of the stronger U.S. jobs report. The sterling move lower started earlier in the week after the Bank of England left rates at a record low 0.5 percent and unexpectedly increased its asset purchase plan, indicating that financial conditions remain weak. The Australian dollar traded sideways in Asia Monday as the U.S. dollar broadly held its ground, while shorter dated bond futures fell to fresh lows on increasing expectations for monetary policy tightening in coming months.

Currency Market Outlook Monday

The euro, pound and yen are all higher against the dollar Monday due to demand from Japanese exporters, yet those moves seem tentative and could reverse later. Meanwhile, the pound is seeing some buying against the euro. European stock markets are expected to open lower Monday, as investors bank gains as the second quarter earnings season draws to a close and after the release of the key employment data in the U.S. Friday. The pound vs dollar posted lows at USD1.6653 before recovering back, edging to USD1.6692 before meeting further resistance. The exchange rate currently trades around USD1.6665. Bids remain in place on the approach to USD1.6650, a break below USD1.6640/35 could open a deeper move toward USD1.6610/00. Resistance is seen placed at USD1.6700/05 ahead of USD1.6720. A break here may open a move on toward USD1.6750.

Euro vs dollar bids are seen placed toward USD1.4180 (USD1.4182 76.4% USD1.4172/1.4216), a break below here could open a retest on the overnight low. Through here and stronger demand interest is reported in place ahead of USD1.4150 (USD1.4154 NY low Friday). Stops noted on a break of this level, which if triggered may open a deeper move toward USD1.4130/20 ahead of USD1.4100. Resistance is now seen placed toward USD1.4220, a break above will allow for any recovery to extend toward USD1.4230/40 ahead of USD1.4270/80.

The yen may face downward pressure in the near term due to mounting expectations for a global economic pickup, according to many currency analysts. The dollar may climb to JPY98.00, while the euro may rise to JPY140.00. Looking forward, currency traders attention will be focused on a planned two day Federal Open Market Committee meeting starting Tuesday. In addition, they will be watching U.S. data including retail and goods sales on Thursday, and the consumer price index and industrial production, all for July.

Published on Mon, Aug 10 2009, 08:26 GMT

Currency Markets − Morning report

Fri, Aug 7 2009, 09:04 GMT
by Anna Coulling

Master The Markets

Currency Markets Yesterday & Asia Overnight

A weak tone in the Japanese share market fueled risk aversion and caused the dollar to fall slightly against the yen in Asia Friday, though trading was subdued ahead of the anxiously awaited U.S. jobs data later in the day. Speculation that the employment figures might be worse than expected, because other recent U.S. data have been disappointing, also weighed on the dollar against the euro. The Euro declined to as low as USD1.4328 against the US currency in New York afternoon trading, despite hawkish comments from ECB President Jean-Claude Trichet. The European Central Bank kept interest rates unchanged at a record low of 1.0% as widely expected.

The British pound fell after the Bank of England left rates at a record low 0.5 percent and unexpectedly increased its asset purchase plan, indicating that financial conditions remain weak. Recent sterling strength has been boosted by positive domestic data such as manufacturing, consumer confidence, retail sales, and house prices.

The Australian dollar was weaker in late Asian trade Friday as expectations for local interest rate hikes moderated on the back of updated economic forecasts from the Reserve Bank of Australia. While the central bank's August quarterly statement on monetary policy clearly places the prospect of interest rate hikes on the horizon, market pricing for imminent tightening has been extremely aggressive, with analysts saying a pull back in this pricing has been due for some time.

Currency Markets Outlook Today

While the majors are trading in narrow ranges Friday, traders appear ready to test the euro vs dollar and pounds to dollars lower to create entry points for their next rallies and weak U.S. jobs figures could also push the euro toward 1.44 level. However against the yen, the euro may fall if the American employment data is unexpectedly bad, as a poor result could aggravate risk concern and turn players away from the risky euro toward the safe haven Japanese currency. That might also give the market an excuse to take profits on the European currency, which has risen sharply recently.

European stock markets are expected to open lower Friday, with investors ending the week in a cautious manner ahead of the key monthly employment release in the U.S., an important gauge of the strength of the world's largest economy. The euro pound trading in Asia was contained within a range of stg0.8552/68, with early Europe able to extend the base to stg0.8547 only to snap back toward overnight highs. Offers noted toward stg0.8570, with further interest seen extending, and strengthening, toward stg0.8580/85. Support noted at stg0.8545/40, a break to allow for a deeper move toward stg0.8525/20.

Recovery in Asian equities eased the downside pressure with the pound dollar able to recover back to USD1.6794, currently holding around USD1.6765 in early European dealing. Offers seen placed between USD1.6795/00 (USD1.6797 76.4% USD1.6813/1.6744), a break to allow for a retest on USD1.6813, with offers seen to USD1.6820/30 (USD1.6825 initial react lows Thursday). Above here and rate can edge on to USD1.6850. Bids now seen placed at USD1.6745/35, with stops on break of USD1.6730. Stronger support noted toward USD1.6700, with demand seen placed to USD1.6690.

Published on Fri, Aug 7 2009, 09:04 GMT

Currency Markets − Morning report

Thu, Aug 6 2009, 08:06 GMT
by Anna Coulling

Master The Markets

Currency Markets Overnight

The euro fell against the dollar in Asia Thursday as falling Shanghai stock prices made currency traders avert risk-sensitive assets such as the single currency, but it could resume rising later in the day amid the continued bullish sentiment toward the euro. The Shanghai Composite Index, China's benchmark on share markets, fell more than 3% at one point during Thursday's session. That prompted currency players to sell the euro, which tends to weaken when stock prices fall and risk appetite decreases. The dollar rose to JPY95.07 from JPY94.96 and may climb further due to a lack of yen supportive factors for now, which may see the yen push the dollar above JPY96, a level the greenback hasn't been able to breach for the last month.

Currency Markets Yesterday

The Euro rose as high as USD1.4448 yesterday against the dollar, after Goldman Sachs raised its U.S. real growth forecast in late New York afternoon. Investors were also still optimistic about a global recovery and were focusing on the slower pace of U.S. job losses in July compared to June. Earlier, the euro traded as low as USD1.4355 after the weaker than expected U.S. economic data. The British pound hit its highest level against the dollar since mid October as it continued to benefit from earlier upbeat data on UK services sector activity and industrial production.
The Australian dollar was stronger in late Asian trade Thursday as comments from the Chinese central bank offset earlier gains made after surprisingly robust domestic jobs data.

Currency Market Outlook

European stock markets are expected to open higher Thursday, with investors in a positive mood ahead of key monthly rate setting meetings by the Bank of England and the European Central Bank. Equity markets pared losses in afternoon trading, led by the Nikkei's rise, with the Shanghai index edging to -1.4% from lows of -3.5%, allowing the euro vs dollar to edge back toward opening levels. Bids remain in place at USD1.4385/80, and a break below USD1.4375 could expose Wednesday's lows at USD1.4355, with bids noted between USD1.4355/45. Resistance is noted between USD1.4410/15 (recovery high USD1.4412), with stronger interest noted between USD1.4425/35 ahead of USD1.4450.

The UK Pound fell back to USD1.6957 before meeting demand on the dip, recovering back to USD1.7014 as equity markets pared losses during the Tokyo afternoon as the Nikkei rallied to fresh 10 month highs. Technical traders note that 76.4% retracement plays have been working well overnight. Resistance remains toward USD1.7015, more at USD1.7030 ahead of a suggested barrier at USD1.7050. Support is seen placed at USD1.6970 ahead of USD1.6955/50. Analysts said the Australian dollar is likely to be well bid as European trade gathers pace but is likely to face strong selling on any rallies into the USD0.8500 level. Market participants are awaiting the Reserve Bank of Australia's August quarterly statement on monetary policy and U.S. Department of Labor's July non farm payrolls, both due Friday.

The Bank of England and the European Central Bank both conclude regular policy meetings later in the day, with both widely expected to keep rates on hold. Signs the British economy could pull out of recession by the end of the year are feeding expectations that the central bank will put its 125 billion pounds (USD211 billion) asset purchase program on hold, instead of extending the quantitative easing.

Published on Thu, Aug 6 2009, 08:06 GMT

Currency Markets − Morning report

Wed, Aug 5 2009, 07:54 GMT
by Anna Coulling

Master The Markets

Currency Markets - Morning Update

The Japanese yen rose slightly against the dollar and euro in Asia Wednesday as weak Japanese stocks prodded investors into buying the safe haven Japanese currency, while some currency traders took profits on a spike overnight in the European unit. During the Asian session, which dealers said was quieter than usual ahead of the data release, the dollar declined a third of a yen to JPY94.97 compared with New York late session on Tuesday. The euro fell a little less than a third of a yen to JPY136.85. Against the yen, the euro faced a relatively greater degree of selling pressure compared with the dollar, because traders sold the common currency to lock in gains after it rose to JPY137.70, a ten-month high.

In yesterday's trading, the Euro moved sideways after retreating from a multi month high of USD1.4445 formed on Monday. Euro zone PPI came in at 0.3% compared to economists' forecasts of 0.2% and the market reaction to the data was somehow muted. The British pound rose near a nine month high against the dollar as positive data helped increase risk appetite. Domestic house prices rose 1.3% in July, which was much better than forecasts of a 0.2% increase. Manufacturing also expanded for the first time in more than a year in July as it climbed to 50.8 from a revised 47.4.

The Australian dollar was marginally weaker late in the Asian session Wednesday, weighed by a late downturn in equities markets and capped below recent peaks ahead of crucial employment and central bank updates due later this week. The Reserve Bank of Australia moving its policy stance to neutral from easing Tuesday was largely expected by market participants and slightly less pronounced than some investors may have been hoping for.

Currency Markets Outlook This Morning

The yen is marginally higher against major rivals Wednesday as stocks markets continue to consolidate. Some traders noted that whether the yen's rise has staying power is uncertain. With sentiment toward the world economy improving, the currency could fall back if key economic data due later in the global day paint a rosy picture for the U.S. economy. From now traders will be closely watching for the July jobs data from payroll giant Automatic Data Processing due at 1215 GMT, and the non manufacturing index for the same month from the Institute for Supply Management at 1400 GMT. Economists expect the employment data to log 350,000 job losses in July, compared with 473,000 losses in June. The ISM index is expected at 48.2 in July, up from 47.0 in June.

The Euro break of USD1.4500 to USD1.4505 could trigger another rally, say currency analysts, and the unit should climb toward USD1.50 over the next couple of months. European stock markets are expected to open higher Wednesday, benefiting from a positive close on Wall Street Tuesday, but gains are likely to limited as investors watch corporate earnings, particularly from the banking sector, with caution.

Published on Wed, Aug 5 2009, 07:54 GMT

Currency Markets − Morning report

Tue, Aug 4 2009, 08:09 GMT
by Anna Coulling

Master The Markets

Currency Markets Yesterday

Rallying equities and commodities markets pushed up currencies that benefit from increased risk tolerance such as the euro and U.K. pound to multi-month highs against the dollar and yen in Asia overnight on Tuesday. Markets are getting a lift from the perception that the global economy is recovering, and unless new signs appear that dispel such views, the dollar and yen are likely to remain weak. The pound rose to USD1.7004 against the dollar, its highest level since Oct. 21, and JPY162.23 against the yen, the highest since June 12. The euro strengthened to JPY137.70, its highest level since June 15. In addition, the New Zealand and Australian currencies hit multi-month highs against the yen and dollar. The dollar, meanwhile, was unchanged against the yen, but is expected to rise because the Japanese currency is usually the weakest unit when risk appetite increases. The euro vs dollar rose to as high as USD1.4444, before closing at USD1.4421. This was the USD's weakest rate against the European currency since the middle of December last year.

During trading yesterday the pound dollar pair rose by over 250 pips in Monday's trading to the USD1.6980 level. This may also have been helped as the USD came under increasing pressure from the rise in daily oil prices and other commodity prices. The euro dollar climbed by 190 pips to USD1.4421, the highest level since December 2008, just weeks after the collapse of Lehman Brothers.

The Australian dollar was firmer late in Asian trade Tuesday but off a 10-month high hit earlier in the session as pared back interest rate hike expectations eroded gains made on the back of another firm rally in risk-proxy assets. The pull back in the currency from its recent peaks is expected to continue in the session ahead, with the run up in equities and commodities markets now showing signs of cooling.

Currency Market Outlook

The euro, yen, dollar and U.K. pound are trading little changed against one another as dealers step aside to see if stocks can resume their rally after an expected consolidation on Tuesday. The euro vs dollar move above its recent June high of USD1.4338 is likely to keep the dollar weak for now as investors are forced to bail out of dollar longs in the near term. The continued rise in equity markets will keep safe haven currencies like the dollar and the yen under pressure in the short term.

The pound vs dollar touched a high of USD1.7005 before quickly reversing, the snap back prompting profit taking which took the rate back to USD1.6924 ahead of the European open. Buying on dips into Europe has seen the rate recover again, this time to USD1.6967 at the time of writing, with underlying tone remaining firm. Resistance noted between USD1.6975/85 (61.8%/76.4% USD1.7005/1.6924), a break above to open a retest of the area between USD1.7000/05. A break above USD1.7010 may open a move toward USD1.7030/35 ahead of USD1.7050/60 (USD1.7055 1.618% based on pullback from USD1.7005 to USD1.6924). Support remains ahead of USD1.6920, more at USD1.6900 and USD1.6885/80.

One focus for the Asian markets will be the Reserve Bank of Australia's policy statement due out around 0430 GMT. Australian central bankers are expected to signal an end to further interest rate cuts. If the RBA statement is more hawkish than expected, it could lead to further buying of risk currencies such as the Australian dollar. Many traders have suggested that the Australian dollar's bullishness in spite of unexpectedly weak retail sales data underlines how much risk appetite has returned to the market.

Published on Tue, Aug 4 2009, 08:09 GMT

Trading Currency − A Summary

Fri, Jul 31 2009, 15:49 GMT
by Anna Coulling

Master The Markets

Previous Currency Market Summary

The Euro slipped against the USD & JPY following release of second quarter US GDP figures, which initially sent sent US stock futures down. The common currency, however, remains up on the day. Sentiment may have been bruised by a further deceleration in consumer spending, as job loss fears are keeping potential shoppers wary of spending. The reaction in currency markets, however, was relatively muted. The Dollar fluctuated in the immediate aftermath of the release, before gaining along with the Yen on safe haven flows. With GDP growth coming in better than expected at -1.0% as opposed to forecast of -1.4% currency traders kept a close eye on equity markets' reaction for any clues as to investor risk tolerance which tends to rise with equities.

EURO is performing better than expected, continuing the minor rally that started yesterday lifting above the USD1.4100 handle for a high print at USD1.4146 and holding firm above previous resistance at USD1.4120; low prints at USD1.4063 making for a firm bounce off the 50 day MA despite quiet volumes.

USDJPY is holding above the JPY95.50 area after opening below there in Asia, low prints at JPY95.19 with highs at JPY95.73 making for a technical inside range day. Exporters have had continuing interest to sell above the JPY95.50 and JPY95.70.

Market Expectation

EURUSD powers through all three moving averages to break above 1.42 as S&P and DOW hold onto gains although volume in both is pitiful. USDJPY finding support at 14 day moving average refusing, so far, to break below 97.73. Cable too pushes up beyond 1.66 so risk appetite is firmly back on the menu this afternoon providing Friday afternoon currency traders with plenty of two way action. With S&P likely to close on a doji candle and very little volume August promises to be an interesting month. Have a great weekend!

Published on Fri, Jul 31 2009, 15:49 GMT

Trading Currency − A Summary

Fri, Jul 31 2009, 08:14 GMT
by Anna Coulling

Master The Markets

Previous Currency Market Session Overview

The Euro rose against both the USD and Yen in Tokyo Friday following a rebound in regional equity markets prompted players to buy the risk sensitive common currency, though any gains are likely to be limited ahead of the weekend. Stronger equities calmed investors' nerves, frayed earlier in the week by the sharpest fall in Chinese stocks since November.

The USD was down slightly against the Yen, trading hands at JPY95.34 at 0450 GMT compared with JPY95.50 late Thursday in New York. Selling orders from Japanese exporters for month end settlements were likely to keep a lid on any rises during Tokyo trade, with resistance around JPY95.60.

The Euro rebounded strongly against the USD, going as high as USD1.4096 on Thursday from a two-week low of USD1.4007 formed in the previous day as a surge in global stock markets encouraged investors to become more risk aggressive. In addition, German unemployment unexpectedly dropped in July by 6,000 and jobless rate held steady at 8.3 percent - investors taking this as a positive despite the fact that the numbers do not include the 30k jobless enrolled on government sponsored training programmes or the extensive use of government subsidies to companies to keep staff on shortened hours.

The British Pound rose too against the Dollar on reports that UK house prices had climbed in July, for a third month in a row, suggestive of improvements in the economy & analysts now calling a bottom in this sector.

A more positive risk tone and firmer regional equities also helped the Aussie Dollar to climb higher in Asia trading Friday ahead of a slew of top tier domestic data and fresh central bank growth forecasts scheduled for release next week.

Forex Market Expectation

Fresh demand into early Europe lifts EURUSD back to retest overnight highs, extending to USD1.4140 but falling back at writing, as traders square positions ahead of month end and expectation of USD sales, so expect some strong two way action.

Sterling is expected to be a main beneficiary of end month fix interest (along with the CommDollars - Aussie and Cad). Offers now seen placed toward USD1.6585, with further interest noted from this level to USD1.6600. Support seen placed at USD1.6525/20, USD1.6485/80.

Key fundamental data today includes US Q2 GDP data which will be in focus this afternoon for determining risk positions into the weekend. Eurozone unemployment rate & GDP month on month figure for Canada. European stock markets are expected to open a tad lower Friday amid caution as the focus lies squarely on economic data, and in particular the US second quarter GDP release, and what this indicates about the economic slowdown as analysts expect the data to show the US economy contracted by 1.5% in annualized terms in the April-June period. Anything weaker could be a boon for the JPY. However, even if equity markets in Europe and US do gain the Euro is unlikely to extend its recent highs ahead of the weekend.

Published on Fri, Jul 31 2009, 08:14 GMT

Trading Currency − A Summary

Thu, Jul 30 2009, 16:31 GMT
by Anna Coulling

Master The Markets

Previous Currency Market Session Summary

The USD rebounded slightly earlier this week after the dollar index touched a new low for 2009 below the 78.40 level and both USD & JPY were buoyed temporarily as equity markets faltered. Fundamental data helped the US currency pare its losses versus the Euro and gain ground on the Japanese currency. One dollar bought JPY95.51, up from JPY95.04 on Wednesday. The low-yielding yen has been the biggest loser as investors warm up to holding riskier assets. Currency markets had a muted reaction to Japanese industrial production figures. The Ministry of Economy, Trade and Industry said Japan's industrial output rose 8.3% in the April-June quarter from the January-March period - the biggest on-year jump since 1953.

The number of people out of work in Germany, Europe's largest economy, fell more than expected. However, the figure excluded 30,000 jobless enrolled in a new government sponsored training program and is being kept artificially low by the extensive use of government subsidies to companies to keep staff on shortened hours rather than lay them off. Both the Federal Labour Office, which published the jobless data Thursday, as well as independent analysts, repeated that unemployment is likely to rise by another million or more over the next year as the worst recession in 60 years takes its toll.

In contrast, in the US the tally of continuing jobless claims - drawn by workers for more than one week - fell by 54,000 during the week ended July 18 to 6,197,000 the lowest level since April 11. This data set spurred the USD & Euro to intraday highs against the safe haven Yen. The Aussie Dollar also reached a session high against the US dollar to USD0.8262.

Forex Market Expectations

EURGBP extends to challenge stg0.8510 and a break opens a move toward stg0.8500 with stops noted below this level. If stops triggered then we could be seeing a deeper move toward stg0.8470 (76.4% stg0.8400/0.8698).

EURUSD trades to USD1.4010 area and finding support on the 40 day moving average and no doubt tempting Euro longs. Technical Cable traders can take note that the rate achieved its target level at USD1.6527 (76.4% USd1.6585/1.6338), with further technical levels coming through to USD1.6535. Added to this the gravestone doji on the hourly candlestick chart would suggest Cable could be in for a deeper pullback off rally highs. The USD1.6500 level holds an option expiry for the 1400GMT cut with traders suggesting that we could see cable drift lower following expiry.

Tomorrow's advance GDP data is likely to offer more clues and could spark a USD rally if data shows that economic conditions will take much longer to turn back to growth. Look for a firm close in the USD today after two-way action.

Published on Thu, Jul 30 2009, 16:31 GMT

Trading Currency − A Summary

Thu, Jul 30 2009, 11:21 GMT
by Anna Coulling

Master The Markets

Previous Currency Market Summary

The Euro edged up slightly against the USD & JPY Tokyo Thursday as Asian traders bought on the overnight fall in New York. However, traders also aware that the risk sensitive currency could resume its decline if global share markets remain weak later in the day. In the early Thursday trade, traders bargain hunted the Euro following its overnight slide to the lowest levels against the USD & JPY in two and one week respectively. The relatively cheap Euro was apparently particularly attractive for month end position squaring.

The Euro was a large mover with a relief rally in Asia being sold for the rest of the day for a test of USD1.4000 which managed to hold firm. The fall from USD1.4300 has been brutal for Euro longs and could induce more selling on rallies as longs try to bailout. Investor sentiment was key in getting the Euro higher so if stocks fall then that support may slip.

The British pound fell against the USD as a 7% drop in the Shanghai Composite Index prompted investors to shy away from riskier assets. In addition, official data showed that British financial institutions lent less money to households last month than at any time in the past 15 years. Cable slid to as low as USD1.6346 in the European morning session before rebounding.

The Aussie Dollar dragged itself higher in Asian trade Thursday and could enjoy further gains offshore if stock markets tick higher while bond futures continue to suffer from an ever improving economic outlook.

Forex Market Expectation

The Euro is responding to some buying interest around the USD1.4000 level Thursday and could find even further long position interest below that level, although scalping for quick profits appears to be the order of the day. Cable too is seeing a degree of speculation as both sides battle it out as the rate rebounds back towards USD1.65 and may continue higher if European equities open higher and investors ignore the fall in the Shanghai Composite and decide to focus on any sign that the global recession may be coming to an end.

EURUSD has eased off highs ahead of the European open, as traders note that the USD1.4085 price point holds the strike of a decent size expiry for today's 14.00GMT cut. Once above this level the rate could push towards USD1.4120/25. However, support at 1.4010/00 must hold otherwise we could see a deeper move back towards USD1.3965/60.

The remainder of this week will see traders and investors watching Asian share markets (particularly the Shanghai Composite) which back in 2007 was the first to herald the start of the current financial meltdown and may once again be the harbinger of some very bad news.

Published on Thu, Jul 30 2009, 11:21 GMT

Trading Currency − A Summary

Wed, Jul 29 2009, 17:04 GMT
by Anna Coulling

Master The Markets

Previous Forex Session Summary

The USD is broadly higher Wednesday morning following a weak performance by Chinese stocks contributing to a waning appetite for riskier assets. Although it had retreated somewhat from its overnight gains as NY trading progressed, the Dollar showed little response to news of weaker than expected US durable goods orders for June. According to the Commerce Department manufacturers' orders for durable goods decreased 2.5% last month to a seasonally adjusted USD158.57 billion. The 2.5% fall represented weaker demand for cars, planes and computers whereas analysts had been expecting a fall of only 0.6%. In addition the May orders were also revised downwards from 1.8% to 1.3%. Thus the markets' primary focus remained firmly on the re-emergence of risk aversion which first surfaced on Tuesday and gained momentum during Asian trading session Wednesday.

Euro bought USD1.4103, down from USD1.4160 late Tuesday, after briefly slipping to a new low for the day at USD1.4086 in the wake of the above data. The British pound bought USD1.6384, down from USD1.6433. Overnight selling in the pound took the rate down to USD1.6350, but it has since rallied back to the USD1.6450 level. A UK report of net lending to individuals posted a record low.

Forex Market Expectations

Dow Jones Futures are lower in early New York trading keeping pressure on the USD to the upside and with a raft of US data due this morning it appears that traders are favouring the long side of the USD into mid-week.

EURGBP rate falls below stg0.8570, the move triggering stops for rate to extend lows to stg0.8562. Rate currently trades around stg0.8573.

USDJPY stalled again at JPY95.00 area as the 200 day moving average continues to influence and selling emerges ahead of JPY95.10 European hours high. Talk now emerging, perhaps unsurprisingly, of stops above JPY95.20.

Some banks are now forecasting the USD to rise to 100 Yen by the end of the third quarter of 2009, compared with a previous estimate of 105 yen. They are also predicting 105 Yen by the end of the 4th quarter, down from a previous of 110 Yen. They then expect the rate to achieve 110 by end of Q1 2010 (down from 112) - signs of goalposts being shifted.

EURUSD getting batted lower again to trade at USD1.4075 area and with month end (and summer holidays beckoning) this drift lower will no doubt cause a certain amount of feverish activity.

Published on Wed, Jul 29 2009, 17:04 GMT

Trading Currency − A Summary

Wed, Jul 29 2009, 09:00 GMT
by Anna Coulling

Master The Markets

Previous Forex Trading Session Summary

Knee-jerk selling on a reported car bomb blast in Spain has been cited as adding to the Euro's weak tone against the JPY in Asia Wednesday, along with a wave of Euro denominated bond redemptions due tomorrow. The Euro fell to JPY133.39 from JPY133.75 and to USD1.4160 from USD1.4180.

Meanwhile the USD also fell against the JPY on the back of the worse than expected result of the two year Treasury auction causing market jitters about the fiscal health of the US. The Euro had hit a high of USD1.4305 in the European morning session but it later tumbled to USD1.4130 following release of US consumer confidence index for July which came in worse than expected at 46.6 against a forecast of 49.0 and a reading of 49.3 in June. The data suggesting that signs of recovery in the US are at best mixed and, at worse, extremely fragile and vulnerable owing to a difficult labour market.

The UK pound also fell against the USD as negative fundamental news pushed investors into safe haven currencies with the CBI monthly survey of retail sales indicating that a majority of retailers are foreseeing lower sales in the near future.

The Aussie Dollar fell sharply in Asia Wednesday, trading off softer regional equities and a weaker Euro, and a further test of key support levels is highly likely. The Aussie Dollar is also vulnerable to a move lower on the back of any sudden swing away from riskier assets and profit taking.

Forex Market Expectations

The JPY is gaining on the UK pound, Euro and US dollar Wednesday, as investors take a breather from the stock markets. Euro selling has been most likely sparked by speculation along with the expected Euro bond redemptions as traders adjusted positions and may be short lived.

EURUSD extended lows to USD1.4110 and traders now watching the USD1.4100 support which, if breached, could trigger a deeper move lower. European stock markets are seen opening modestly higher Wednesday, as investors regain their poise after Tuesday's consolidation which brought the run of equity gains to a grinding halt.

Published on Wed, Jul 29 2009, 09:00 GMT

Trading Currency − A Summary

Tue, Jul 28 2009, 19:07 GMT
by Anna Coulling

Master The Markets

Previous Forex Trading Session Summary

The Euro has extended its declines and dipped below the USD1.42 mark in morning trading Tuesday after climbing on strong risk appetite earlier and briefly reaching above USD1.43 before reversing direction. The Euro was one of several risk sensitive currencies to benefit in earlier trading from bullish remarks by Reserve Bank of Australia Governor Glenn Stevens, who said the economic downturn was likely to be less severe than expected, pointing to signs of recovery in consumer and business confidence, as well as housing finance and prices. His remarks helped foster an atmosphere of risk appetite that also supported gains by the Euro and other risk sensitive currencies, although those gains were eroded as stock futures pointed to losses at the open in Wall Street. This in turn led to a weak opening in US equities.

The British Pound, Canadian Loonie joined the Euro in losing ground in this morning's trading, along with the hitherto strongly performing Aussie Dollar. The exception was the Japanese Yen which prospered as risk appetite waned.

Forex Market Expectation

Traders and investors have become jittery as discussions in Washington between the US and China come to an end given the extent to which the value of Chinese reserves have fallen as a result of a weaker US Dollar. The US may well come under pressure from Chinese officials to "talk" the Dollar higher.

EURUSD eases lower again to trade under USD1.4200 as market seems torn between a triple top failure at USD1.4300 and the urge to buy on dips. A sustained break below USD1.4170 is now pivotal support for any move higher.

Although UK Pound also taking a hit as Eurodollar extends the day's lows it stays contained within a relatively tight range. Markets also focusing on CFTC discussions to limit speculation in commodity markets and bring in tighter regulations. There is much for forex traders to ponder during this summer lull!

Published on Tue, Jul 28 2009, 19:07 GMT

Currency Markets − Morning Report

Tue, Jul 28 2009, 11:32 GMT
by Anna Coulling

Master The Markets

Currency Market Report Overnight

Upbeat comments on the economy by Australia's central bank governor Tuesday whetted investors' risk appetite, boosting the Australian dollar, euro and other currencies against the yen. Reserve Bank of Australia Governor Glenn Stevens said that Australia's economic downturn "may turn out not to be one of the more serious ones of the postwar era, in contrast to the experiences of so many other countries." He also said in a speech to economists that it's easier to imagine upside risks to the economy balancing out downside risks.

The Euro was bought heavily during Asia to set up a test of USD1.4300 in Europe before falling quite sharply in the US after failing at this key level once again. German GFK in August climbed to 3.5 vs. 2.9 forecast and help support the pair. The British pound rose against the dollar on Monday as confidence in the strength of corporate earnings continued to support European equities (FTSE-300 index ended the day at its highest close since November 10) and helped sterling recover losses after last week's much weaker-than-expected U.K. GDP data. Cable hit an intra-day low of USD1.6382 in Asia and rallied back to as high as USD1.6525 versus the greenback in European morning.

The Australian dollar rushed to a 10-month high Tuesday and short end bond futures fell to a 10-month low after Reserve Bank of Australia Governor Glenn Stevens was upbeat on the economic outlook in a speech, fueling expectations that the central bank's next move in interest rates will likely be up.

Currency Markets Today

The yen is gaining a little against the dollar and yen with Tokyo equities under pressure. Otherwise, the majors are little changed in narrow ranges as investors wait for fresh trading impulses. Looking ahead, the market will be watching for the U.S. economic data and a U.S. Treasuries auction later in the day, with weak U.S. data or a rise in long-term interest rates on a poor auction, likely to weigh on the dollar once again. Currency traders have suggested that thin trading conditions may have exaggerated the yen's losses, and that the Japanese unit might not stay weak for long.

For the euro vs dollar offers are said to remain in place toward USD1.4300 (USD1.4299 Monday high), with talk suggesting that the figure holds an option barrier (topside of a USD1.38/1.43). A break above the figure expected to trigger stops, though any pressured move should see profit take offers quickly emerge to counter an initial break. If the rate can clear higher, it is expected to revisit the year's highs at USD1.4339 (Jun 3). Support is seen placed at USD1.4220, USD1.4205/00. Pound traders report offers in place between USD1.6570/80 with stops placed on a break above. Rate currently holds back around USD1.6525 after the early rally extension to USD1.6558.

European stock markets are expected to open largely flat Tuesday, as the rallies that have defined the asset class for almost two weeks start to run out of steam.

Published on Tue, Jul 28 2009, 11:32 GMT

Trading Currency − A Summary

Mon, Jul 27 2009, 11:22 GMT
by Anna Coulling

Master The Markets

Previous Currency Market Session Summary

The Dollar rose against the Yen Monday in Asia on the back of a recovery in risk appetite, however further gains may be limited with options about to expire. The Dollar climbed to JPY94.93, as rising Japanese stocks prompted players to buy risk sensitive currencies. Japan's benchmark Nikkei 225 Stock Average rose above 10,000 for the first time since July 1. However, further gains may be limited given the propensity for traders to cluster sell orders at JPY95.00.

The EUR continued to strengthen against the Dollar on Friday as data showed Eurozone economy stabilizing and German business sentiment is also rising, suggesting that economic activity in the region is improving. The German Ifo business climate index increased to 87.3 in July from 85.9, and much better than the consensus forecast reading of 86.5. Meanwhile German PMI manufacturing and services indices also rose more than expected. These 2 stronger than expected data sets boosted EUR to an intra-day high of USD1.4255 against the Dollar in Europe. However, price did retreat in New York session .

The British Pound fell against the Dollar following release of a report that showed the UK economy shrank more than expected. Domestic GDP fell 0.8% in the second quarter, compared to forecasts of a 0.3% fall, taking the shrinkage in the economy to a massive 5.6% from the previous year. Sterling also suffered as a result of a fall in the Index of Services which came in at -1.0% against a forecast of -0.3%.

The Aussie Dollar pushed higher in thin trading Monday, while bond futures fell as risk appetite again ticked higher ahead of a keynote speech by Reserve Bank of Australia Governor Glenn Stevens on Tuesday.

Forex Market Expectation

The Euro and Dollar are little changed against each other and the JPY Monday, while Sterling is slightly lower against its major rivals as a result of some light technical pressure. Meanwhile, traders are likely to watch re-surging stock markets for hints about this week's risk tolerance. European stocks are seen opening higher Monday as optimism remains infectious with traders predicting there are still more gains to come in global equities following several days of rallies.

EURUSD currently trades around USD1.4245 with the underlying tone remaining positive. Above USD1.4260 to expose stops, which if triggered to open a move toward USD1.4290/00. Above USD1.4300 and the early June 2009 highs at USD1.4339 may move back into view. Support seen at USD1.4220, a break below to allow for a move toward USD1.4200/1.4190 with stops placed on a break below. Further demand placed toward the overnight low at USD1.4170.

Sellers include Japanese exporters and currency options players, who sold dollar-call/yen-put options contracts, with a JPY95.00 strike that will expire later in the trading session. The sellers will lose money if the dollar is traded above the strike price when contracts expire.

Later this week, market attention will turn to moves in US Treasury yields as the market prepares to absorb a record amount of bond supply.

Published on Mon, Jul 27 2009, 11:22 GMT

Currency Markets − Afternoon Report

Fri, Jul 24 2009, 15:02 GMT
by Anna Coulling

Master The Markets

Currency Markets Today

The U.S. dollar lost ground to the Euro Friday, after a raft of fundamental data in Europe beat analysts expectations suggesting that a recovery was possibly on the horizon. One of these fundamental news items was the Munichbased Ifo Institute's July German business climate index, which rose for the fourth consecutive month in July, posting a reading of 87.3. Economists had forecast a rise to 86.5 from 85.9 in June. The euro saw a modest jump versus the dollar after the data, extending gains above the 1.42 level. Data from the U.K., however, went against the prevailing trend of better than expected readings and has weighed on pound sterling, Friday's notable under performer so far. U.K. gross domestic product for the second quarter was reported to have contracted by 0.8% from the previous quarter, a deeper decline than had been forecast. Some of the pressure on the pound is over concerns that persistent U.K. economic weakness may lead the Bank of England into expanding quantitative easing measures, which are usually negative for a currency in the short run at least.

The US dollar vs yen continues to hold in the 94.86 region having oscillated between the 94.68 and 94.93 levels since the start of the US session as some profits are booked on yen shorts and as traders keep an eye on US stocks, in order to determine the next leg of the risk-on/risk-off saga that has played out this week.

Currency Markets - Outlook This Afternoon

The euro vs dollar is nudging higher again to trade at 1.4240 in the upper reaches of the US session range that peaked at USD1.4254 earlier, the move actually building ahead off the stocks rebound. Offers remain around USD1.4260 and very light chatter has suggested that sovereigns were earlier sellers into the euro bounce, though not necessarily into the highs. The Euro is currently easing to 1.4235. Traders note that likely model and momentum accounts got whipsawed yesterday and are likely to be sidelined today without more volatility higher as they appear to be biased to the upside. The UK Pound extended recovery to USD1.6459, the rate seen meeting resistance from offers placed around USD1.6460 (76.4% USD1.6482/1.6389). Above USD1.6460 could open a move back toward USD1.6480/85, with support noted toward USD1.6400. Meanwhile the dollar yen continues to hold the 94.95 area in current trading after the shallowest of dips to 94.85

The US dollar is consolidating the lows again after Thursday's solid attempt at a rally, a big disappointment for the bulls - traders were looking for the USD to hold gains into Friday with a real chance of an equities sell off adding to the hopes for a bottom. Although the dollar is forming a wide trading range many analysts think the sentiment is overly bearish and the shorts will cover soon. If equities can't follow through today, many analysts expect to see a USD rally as risk is taken off the table. Look for a better close today for the US dollar.

Published on Fri, Jul 24 2009, 15:02 GMT

Trading Currency − A Summary

Fri, Jul 24 2009, 10:09 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

The Dollar edged lower against major counterparts in Asian trading Thursday, while it got a lift against the Yen as a result of a surge in Japan's trade surplus last month.   Although the data reflected a trade surplus for the fifth straight month in June, and posting almost 5 fold from the same period last year, it was nevertheless just shy of forecast.

Eurodollar trading inside a 60 day range and although it has been lingering at the top of the range, buyers have been reluctant to buy or sell heavily at this high level. It is also lacking any the technical momentum to drive it through the high for the year at USD1.4337.   Buyers have backed away on each approach given the lack of solid evidence that the Euro Zone is clearly on the road to recovery.

The GBPUSD has also been trading in a narrow range today while the US Dollar continued to hold steady against the Euro. The British Pound initially showed weakness against the dollar following the announcement earlier in the week that UK government debt had GBP799 Billion, or 56% of GDP. However, any weakness against the Dollar seems to have run its course and the cross settling into a range.

Forex Market Expectation

The key to any prolonged rally in the EURUSD will be the direction of interest rates. While Bernanke said the Fed would gradually raise rates he did emphasize that it would be difficult to pinpoint a time for such a move and that it could only take place once the current QE strategy had run its course. Some analysts believe we are months - or perhaps even years - from a substantial interest rate hike.   Based on this scenario, the Euro should maintain its strength versus the Dollar as long as the European Central Bank doesn't surprise the market by cutting their interest rates.

The real fear for the Dollar bulls should be whether the ECB will raise rates before the Fed because the ECB tends to see inflation when and where it wants to find it. Furthermore, the ECB has never hesitated in taking such action and with a meeting scheduled for 6th August traders should not discount the possibility (however remote of a surprise hike in rates). If EURUSD is still sitting at the top of its current range this may just be the trigger needed for an explosive breakout.

In the meantime the Dollar may have received some support against the Euro via the Swiss National Bank, although analysts are unsure if recent activity has been due to SNB intervention, which has been happening since mid March.

Published on Fri, Jul 24 2009, 10:09 GMT

Currency Markets − Morning Report

Fri, Jul 24 2009, 09:18 GMT
by Anna Coulling

Master The Markets

Currency Markets Overnight

Massive dollar selling by big Japanese banks taking profits after the greenback's rise to a two week high overnight pushed the currency down in Asia on Friday, but the rise may resume next week as sentiment remains buoyant. The euro also fell against the yen due to similar profit taking by banks. Market participants sold the dollar after it rose to 95.30 overnight against the Japanese yen to take profits and adjust their holdings. It was the dollar's highest level since July 7th, but it wasn't able to break above the psychologically important 95.50 mark.

On Thursday, the dollar ended mixed, rallying sharply against the yen on talk of investment outflows from Japan while retreating against the Canadian dollar and other risk sensitive currencies as stocks and commodities advanced. Earlier in New York trading the euro hit a seven-week high of USD1.4292 against the greenback as rosy U.S. corporate earnings fueled optimism on the economy and dented safe haven demand for the U.S. dollar and the Japanese yen. The upbeat housing data also encouraged investors to buy higher yielding assets. U.S. existing home sales data showed a 3.6% increase month-on-month compared to the consensus forecast of 1.5%. However, in late New York trading, the euro tumbled to USD1.4118 as corporate earnings from Microsoft disappointed, fell well short of analysts expectations, along with those of Amazon and American Express.

The British pound was stronger against the dollar as positive data increased risk appetite. Domestic retail sales rose 2.9% in June from the previous year, beating forecasts of a 2.1% increase. Retail sales were much better than the previous month's data, which were revised down to a decrease of 2.0% from a decrease of 1.6%. The Australian dollar was weaker in late Asian trade Friday, as profit taking and weaker than expected results from Microsoft dented an otherwise spirited rally in high yielding assets.

Currency Markets Outlook

The euro and other majors are broadly mixed Friday, and may see minor moves until investors sort out which direction stock markets will embark on later. European stocks are expected to open modestly lower Friday, with investors ready to bank the week's gains amid disappointing numbers from big U.S. technology companies which failed to meet market expectations Thursday. Such greenback selling may push the dollar and euro down for the rest of the global day, but some dealers expect the currencies to rise next week on the back of reviving risk appetite.

Many traders expect the US dollar to get a boost from Japanese trust funds Monday. These funds have been rumored to be preparing to invest in dollar denominated assets very soon. The euro declined against the dollar to 1.4157 from 1.4203 in New York on Thursday. Dealers said trading is lackluster, so it may stay in a 1.4100 - 1.4200 range for the rest of the global day.

Published on Fri, Jul 24 2009, 09:18 GMT

Trading Currency − A Summary

Thu, Jul 23 2009, 11:58 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

Both the Dollar and the Euro rose sharply against the Yen in Asia Thursday as firm Asian shares lessened risk aversion, despite a weak Wall Street session. Speculation that Japanese funds may buy Dollar & Euro denominated assets this week also hurt the Yen.
The U.S. currency climbed to JPY94.33 from JPY93.54 in New York Wednesday and the Euro rose to JPY134.31 from JPY132.96.

The Euro also rose against the Dollar, to USD1.4247 compared with USD1.4211 in New York Wednesday. Traders think that if the rate at which the Euro strengthens against the Yen outpaces the Dollar's rise against the Yen, then this could add a degree of bullish momentum to the Euro against the Dollar.

The British Pound fell against the Dollar after a report showed that the decline in UK house prices will continue to blight the market until 2012. The London based National Institute of Economic and Social Research said that house prices will slide as the economy keeps shrinking. The Bank of England's minutes showed that the nine-member Monetary Policy Committee voted 9-0 to keep interest rates at 0.5%.

Federal Reserve Chairman Ben Bernanke continued with his testimony to the US Senate Wednesday that the shape of the economic recovery will depends primarily on the evolution of the labour market and the health of the American consumer. Bernanke added that Fed officials expect a recovery to start off relatively slowly, partly because consumers are grappling with high debt and housing price declines.

Stronger commodity prices and risk appetite helped the Aussie Dollar higher Thursday, although analysts said its recent bullish run could soon head into technical resistance.

Currency Market Expectation

The Yen seems to be taking a beating Thursday from both the Euro and the Dollar on technical selling, while the latter pair are little changed. The Yen could suffer further losses later in the session. Both the Dollar and the Euro could get a further lift against the Yen if Japanese trust funds do indeed begin buying Dollar and Euro assets.

Meanwhile, the UK Pound has built up some technical momentum and could make more gains against both the Euro and the US Dollar Thursday. Currency markets will continue to be driven by equities and US corporate earnings, while bond futures are likely to remain under pressure. Europe's major stock markets opened little changed, as investors pause for breath given the recent buying spree and wait for further impetus from corporate earnings results. This could benefit the Dollar over the next couple of session back over Y95.00, a level it is has traded below since 7th July.

Published on Thu, Jul 23 2009, 11:58 GMT

Currency Markets − Afternoon Report

Wed, Jul 22 2009, 09:30 GMT
by Anna Coulling

Master The Markets

Currency Markets - European Trading & Into New York

The U.S. dollar was slightly lower against the Japanese yen on Wednesday but held its ground against other major currencies, as investors eyed a softer tone in equity markets. The dollar and yen have both remained sensitive to moves in equity markets, rallying on safe-haven flows when demand for shares and other assets was perceived to be more risky. Conversely, the currencies have tended to lose ground when investors have shown an increased appetite for risk. The euro traded lower to 1.4120, down from USD1.4197 late Tuesday, and the British pound traded at 1.6437, little changed from earlier. The euro had little reaction to the fundamental news in Europe this morning which showed industrial new orders across the euro zone falling by an unexpected 0.2% in May. Economists had forecast a 2% monthly rise, so the green shoots will have to wait!

The British pound trimmed losses after minutes of the Bank of England's July 8-9 Monetary Policy Committee meeting showed members voted 9-0 to leave the bank's asset purchase program unchanged at 125 billion pounds (USD205 billion). The Canadian dollar has one less roadblock in the way of further appreciation, after the Bank of Canada lowered the intensity of its jawboning against undue currency strength in Tuesday's policy statement. Heading into Tuesday's central bank policy announcement - which produced the expected reiteration of a conditional commitment to hold the key policy rate at 0.2% well into 2010 along with rosier economic projections - there had been concerns that the Bank might again speak out forcefully against rapid Canadian dollar appreciation.

Currency Market Outlook

For the euro vs dollar we are getting reports that offers are now seen placed between /30 from Far East account(s).Traders suggest that interest could be option related noting the large expiry for the NY cut. Early trading in New York has seen demand for the euro crosses, in particular the euro yen which is now trading at 133.11.

The dollar vs yen continue to drift lower in early trading as the markets continue to absorb Ben Bernanke's comments, with many of the major currencies simply trading sideways but with added volatility minute by minute. Very difficult trading conditions at the moment and not for the feint hearted or novice.

Published on Wed, Jul 22 2009, 09:30 GMT

Currency Markets − Morning Report

Wed, Jul 22 2009, 08:53 GMT
by Anna Coulling

Master The Markets

Currency Update - Yesterday & Overnight Trading

The Japanese yen rose slightly against the dollar and euro in Asia Wednesday as short term players bought the safe haven Japanese unit on renewed concern that U.S. lender CIT Group Inc. may go bankrupt, further damaging the U.S. economy. Short term investors responded by pushing the U.S. dollar down to 93.60 in the Asian session from 93.66 in New York late Tuesday, with the euro sliding to132.93 from 133.01. On Tuesday, the euro vs dollar reached its highest level in seven weeks at 1.4278 and then retreated to end lower against the dollar, after risk sensitive currencies in general reversed direction and ceded ground to the greenback. Technical factors, including the market's reluctance to push major currencies out of recent ranges, also played a role in the euro's reversal Tuesday.

The British pound also fell against the dollar after the UK's budget deficit climbed to its highest level since records began in 1993. The budget shortfall climbed to 21.4 billion in June, which beat forecasts of a climb to 25.5 billion, but fueled concerns that the government will struggle to find buyers for its assets.The Canadian dollar rose to its highest level in more than five weeks against the dollar after the Bank of Canada left its key interest rate at a record low 0.25%, whilst it's Aussie counterpart was stronger late Wednesday as risk appetite continued to surge and domestic inflation data helped water down expectations of more interest rate cuts.

Currency Markets - Outlook Today

The euro is continuing its retreat today, along with the UK pound, as worry about risk reappears as market participants continue to watch how the crisis surrounding CIT develops. They will also scrutinize earnings reports due later in the trading day from some of the larger banks such as Morgan Stanley, Wells Fargo, the Bank of New York Mellon Corp. and U.S. Bancorp, which will provide some measure of the state of the U.S. financial sector. As a result we could see the US dollar fall to 92.80 against the yen, and the euro to 132.00 if those reports disappoint investors or concern over a potential CIT bankruptcy grows.

European stocks are expected to open marginally higher Wednesday, as the gains generated by positive earnings data are set to continue but at a lesser pace as investors pause for breath, and reconsider their appetite for risk.

Published on Wed, Jul 22 2009, 08:53 GMT

Currency Markets − Afternoon Report

Tue, Jul 21 2009, 15:54 GMT
by Anna Coulling

Master The Markets

Key Trading Currency News

The Canadian dollar gained ground after the Bank of Canada said the currency's higher level is significantly moderating the pace of overall growth Tuesday. The bank's statement was not as strong as market participants expected, prompting a relief rally that enabled the Canadian dollar to extend its earlier gains. The bank left its key overnight target rate at 0.25%, as expected by the market, and consistent with its conditional commitment to leave it at that level until the end of the second quarter of 2010. Over in the US, Federal Reserve Chairman Ben Bernanke shed light today on the toolkit the central bank are proposing to employ to unwind its crisis measures, but made clear to lawmakers that the economy remains too weak to start tightening monetary policy. Bernanke reiterated that despite recent improvements in the economy and financial markets, the federal funds rate will likely remain near zero for an extended period of time. However he also laid out a number of other steps the Fed can take to tighten policy as needed to head off a potential buildup in inflation.

The euro was pushed to a fresh six week high of USD 1.4278, and the U.S. dollar lost early morning advances against the yen and Swiss franc. This was in part a product of some technical trading, after the euro broke above the USD 1.4250 level.

Currency Markets Outlook

"Time to book swaps," traders complain, noting the light spot volume currently in place, that apparently has prompted an outbreak of rolls and swap trades from client looking to clear the decks ahead of the Bernanke event, with opening remarks still underway from Committee members. Option related accounts and system players are said to have provided lift as the euro vs dollar nudged higher. The weaker tone of the US dollar is said by traders to be adding to the move as it reinforces the risk driven theme of markets, despite cautionary words from the Bank of Canada a short while ago. The dollar vs yen has retreated slightly from the marginal fresh high for the day achieved a short time ago, though this pair remains weak as they continue to probe the strong resistance in place at the 94.50 price level, which should hold firm, with the pair trading lower in due course.

Published on Tue, Jul 21 2009, 15:54 GMT

Trading Currency − A Summary

Tue, Jul 21 2009, 09:14 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session

The Japanese Yen rose against both the Euro and Dollar in Asia Tuesday following comments made by Federal Reserve Chairman Ben Bernanke in a Wall Street Journal column where he stated that the central bank will need to tighten monetary policy down the road. In the column, Bernanke said that "accommodative policies will likely be warranted for an extended period," but that the Fed "will need to tighten monetary policy to prevent the emergence of an inflation problem" as an economic recovery takes hold. His comments appeared to make short-term players more risk-averse, prompting them to sell the Euro and Dollar and move into the safe-haven Japanese Yen, believing that the Fed moving too early to end its loose monetary policy could hinder US growth.

The Euro with help from its crosses especially the EURJPY did manage to make a fresh leg higher into the USD1.42's before running out of steam just shy of USD14250 but holding the level for the rest of the day. June German PPI at -0.1% vs. +0.5% confirmed that Producer Prices are falling at the fastest rate in 40 years as cheaper Oil and Higher Unemployment reduces demand.

British Pound: comments from Charlie Bean at close of Monday suggesting that the UK's current period of ultra-low rates being short-lived, which some interpreted as rates likely to rise more quickly should the economic picture improve. Short-sterling futures were weighed down on the back of this, while cable pushed higher into the close.

The Aussie Dollar was back above the USD0.81 figure in late Asian trade Tuesday as Wall Street forged new highs for the year, although the currency slipped from its intraday peak on Bernanke's comments.

Market Expectation

The Euro is lower against the dollar Tuesday on a fall in US stock futures although some traders will see this as an opportunity to buy with an initial target of USD1.4335. Meanwhile the Japanese Yen against both the Euro and US Dollar while Cable remains under pressure against the majors.

Overnight trade saw sterling tracking the general move back in risk trades, though slippage was initially contained yet as euro-sterling was contained in a tight range. Early European dealing has seen Cable dropping back towards 1.64 thereby eroding some of yesterday's gains following Fed Chairman Ben Bernanke comments as outlined above. The markets will be listening intently to his testimony before the Congressional Committees today and tomorrow for any clue for the future direction of US monetary policy. The affect of his words on the markets cannot be overstated.

European stocks are expected to open slightly higher Tuesday, continuing the buoyant tone seen in the US and Asia, as investors remain optimistic about corporate profits and the chances of a global recovery, however, given the somewhat fickle attitude of investors to risk this sentiment could change in a blink of an eye.

Published on Tue, Jul 21 2009, 09:14 GMT

Trading Currency − A Summary

Mon, Jul 20 2009, 20:58 GMT
by Anna Coulling

Master The Markets

Previous Currency Session Summary

Equity markets continued to set the tone in currency trading Monday, with the Dollar edging lower as investors showed continued appetite for stocks and other assets. Though mostly falling in recent months, the Dollar managed to regain some ground against the Yen this week. Against the Yen it has benefited from a bullish start to second quarter earnings season, with financial sector posting better than expected results.

Across all the majors though the USD is on the defensive, dropping to the lowest levels since early June, and driven further by technical factors. The Greenback started mixed in Asia and had a quiet session as Japan was closed for a minor national holiday; traders noting that sovereign offers in EUR and GBP kept those pairs below recent range-tops. Into the European action the USD came under selling pressure as stops and active buying of some pairs finally pushed the USD into new weekly territory and broke recent tech support zones with confidence.

Late afternoon in New York, the Dollar gained against the yen to JPY94.32 from JPY93.75 Thursday, while the Euro was little changed against the Dollar, at USD1.4141 from USD1.4145. Meanwhile, the Euro was at JPY133.34 from JPY132.63. The UK Pound was at USD1.6381 from USD1.6450, and the Dollar was at CHF1.0743 from CHF1.0735.

Market Expectation

Pound stayed well supported through the opening part of the US session, staying well above all three moving averages and triggering buy orders on the way.

EURUSD easing back to the area in current trading with flows modest and the pair continuing to hold off earlier lows notched up at the start of the US session. That lower area said to offer nearby support for the pair while Euro remains shy of the high.

EURGBP back around the lows though so far unable to make a sustained break below, as was the case Friday. A deeper move below seen exposing the 21-day moving average at, ahead of reported demand into the area.

Investors will look for signals that the foreign-exchange markets are moving in a new direction, so spurts of volatility are possible, given thin market conditions. Risk appetite, while appearing to improve, is expected to remain fickle, as skittish investors change their minds about the global economy's recovery prospects. Investors will now focus on Federal Reserve Chairman Ben Bernanke's testimony before Congressional Committees Tuesday and Wednesday for any clues about an exit strategy from quantitative easing. However, most commentators don't expect him to reveal anything startling.

Published on Mon, Jul 20 2009, 20:58 GMT

Trading Currency − A Summary

Mon, Jul 20 2009, 11:47 GMT
by Anna Coulling

Master The Markets

Previous Currency Session Overview

The dollar gained against the yen in Asian trading Monday, boosted by news that on Sunday night CIT on Sunday night had managed to clinch a two-year, $3bn rescue financing with its creditors thus enabling the troubled US finance group to avoid a bankruptcy filing. With the Japanese markets closed Monday due to the Ocean Day national holiday, the Dollar stayed on its recent mild upswing against the Yen, and last traded at JPY94.55 from JPY94.34.

The Euro rose against the USD and the Yen in Asia Monday, as risk appetite soared amid expectations of more positive news during the ongoing US earnings season - only 25% of corporations have reported to far. The Euro, which traditionally rallies when markets are more willing to take on risk, stopped shy of the key psychological level of USD1.4200 against the USD, which it last hit - very briefly - three weeks ago.

The British Pound fell against the USD was a report from the IMF that said that UK Prime Minister Gordon Brown risks putting further pressure on sterling unless he curbs Britain's budget deficit.

A run up in domestic equities markets combined with light trading volumes propelled the Aussie Dollar and bond yields higher in late Asian trade Monday. With Japanese markets closed, market turnover remained extremely light however higher-yielding currencies held near the top of recent ranges. Meanwhile, weaker-than-expected wholesale inflation data failed to support domestic bond futures, which plummeted to around three-week lows.

Market Expectation

The Euro and USD are gaining against the Yen, although the Euro and Cable are seeing good gains against the USD Monday. However, both the Euro and GBP may face some resistance on the daily versus the dollar later.

The US Dollar is also likely to continue feeling the pressure against high-yielding currencies in the week ahead, given stability in the equity markets and demand for riskier assets.

EURUSD is easing back from earlier Asian highs but pullbacks so far running into support area in European dealing.

Published on Mon, Jul 20 2009, 11:47 GMT

Currency Markets − Morning report

Fri, Jul 17 2009, 08:54 GMT
by Anna Coulling

Master The Markets

Currency Trading Overnight

The fall of the US Dollar has finally taken a pause, and as a result the euro vs dollar has pulled back from its high to test the 1.4050 key support again, a level which has held firm to date. The pound vs dollar reacted in a similar way falling from its high above 1.64, with the pair falling through 1.6335 to trade as low as 1.6285. The dollar vs yen has not been able to hold levels above 94 and has spent most of the Asian session in a 30 pip range around the 93.65 level. Both, the euro yen and pound vs yen have also retraced from the highs overnight.

Currency Outlook Europe

Europe's May trade balance is due to be released shortly followed by Canadian CPI at 11AM GMT. Final data this week will be the US housing starts for June. For the euro vs dollar the support level at 1.4050 is key this morning, and a weekly close above here keeps the pair bullish for next week. Expect the Dollar to closely follow movements of equity markets, and for now the day looks bullish with all indices in Europe opening positively. The pound vs dollar could remain very volatile, and there is plenty of space on either side, with initial support at 1.6260, and resistance at 1.6335.

For the dollar yen, 93.65 remains the key level, and we can move 30 pips up or down before the weekend closure. A high close indicates further yen weakness next week, and while trends indicate a further $ rise, we must not neglect the danger of a large fall that could take the pair rapidly down to 90.00.

Published on Fri, Jul 17 2009, 08:54 GMT

Currency Markets − Afternoon Report

Thu, Jul 16 2009, 16:14 GMT
by Anna Coulling

Master The Markets

Currency Markets This Morning

Both Euro and Cable continued to trade at higher levels in Europe today, with the euro vs dollar climbing, to stretch its high to 1.4165 - up 100 points from this morning after the support level at 1.4050 held firm. The Euro has outperformed the Pound, which climbed as well but did not top last night's high of 1.6465 so far. Both pairs remain bid, in synch with rising European equity markets. The USD vs JPY has tested the 93.65 support level. It did manage a temporary breech right after European lunch today, but the dip was short lived and the pair quickly bounced back to bullish territory. Both the euro vs yen and pound vs yen remained well supported and relatively volatile. The EUR/JPY traded between 131.60 and 133.00 whilst the GBP/JPY ranged between 153.30 to 154.70.

Currency Market Outlook

Looking at the sentiment index, I notice that positions are shifting which may well indicate a change in sentiment longer term. In the euro vs dollar and pound vs dollar, shorts still outweigh longs, but the distribution is much more even compared with just a few days ago when 65% of the market where holding long USD positions. For now the US I see little reason for the current trend to change at present. The euro dollar may push ahead towards 1.43, and Cable has room for a rise towards 1.6750 with strong resistance on the way up at 1.6485. Support levels have held extremely well this morning, and they lie unchanged at 1.4050 for the Euro and at 1.6365 in Cable.

The USD/JPY seems to have survived an attack on its 93.65 support on the one hour charts. A new push higher towards 94.35 could possibly see the top extended towards 95.20. Both the euro vs yen and pound yen are very volatile, but as long as key supports remain in place at 131.35 and 153.50 respectively, I continue to see opportunity for further rise.

Published on Thu, Jul 16 2009, 16:14 GMT

Currency Markets − Morning Report

Thu, Jul 16 2009, 08:47 GMT
by Anna Coulling

Master The Markets

Currency Markets Overnight

The US Dollar kept weakening till the New York close on Wednesday,correlating with rising stock markets around the world. The US dollar took turns to soften against Cable first, followed by the Euro and then spreading to the Aussie Dollar and finally the Canadian Dollar. The euro vs dollar reached a high of 1.4130, whilst Cable traded 1.6465. During the Asian session the US currency finally found some support and the Euro backed down to 1.4050 with Cable softening a 100 pips to 1.6365. Both pairs are now supported at the old resistances, and these are key levels to watch for today.

For the dollar vs yen, the 93.65 resistance popped late European afternoon and the Dollar pushed on to reach 94.45 by closing time. At their opening, traders in Tokyo took advantage of the high levels and the pair pulled back to 93.70. The euro vs yen reached a high of 133.35 before retracing 1%,whilst the pound vs yen traded as high as 155.10 from where it returned to 153.50 later in the trading session.

Currency Markets - European Trading

Today's weekly US jobless claims are expected to fall slightly, and after that markets will be waiting for the US Philadelphia Fed Index for July at 2pm GMT. Apart from these two key pieces of fundamental news, all eyes will be on the equity markets, as a sudden turn is likely to stop the US Dollar weakness very fast.

Euro dollar support lies at 1.4050, and should it hold, there is room to move on higher with 1.4130 the initial stumbling block. If Cable keeps hold at 1.6360, it has space to bypass 1.6460 and rise towards 1.67, whilst the Japanese yen remains under pressure, now above the key 93.65 level, and in bullish territory, and could rise further to 95.30. The Yen crosses rose and remain in positive territory as well, but next resistance levels are not far away with 134 in the euro yen and 156 in the pound vs yen.

Published on Thu, Jul 16 2009, 08:47 GMT

Currency Markets − Afternoon Session

Wed, Jul 15 2009, 16:35 GMT
by Anna Coulling

Master The Markets

Currency Markets - European Trading Session

Cable moved higher this morning, to reach 1.6465, a new high for the month, but the Dollar was weak across the board with the euro vs dollar finally breaking the 1.4050 level clearly, to trade close to 1.4100, with the usd vs chf falling as a consequence, reaching a low of 1.0755. There was little two way flow seen this morning and trading interest was fairly low, indicating that short positions were simply closed and traders may stay sidelined for the moment. The dollar vs yen continued to move in the same, tight range of 93.30/93.60 and for now the resistance is still holding. Naturally the euro yen and pound yen remained bid throughout the European morning, and it is worth noting that the EUR/JPY has now bypassed the 131.35 resistance, leaving some space to stretch the top even further.

The aussie dollar had a very strong come back today, rising 100 pips from its Asian close at 0.7935 to reach 0.8035. With the move the AUD, NZD and CAD are all outperforming the gains of the European currencies this week.

Currency Markets - Outlook

The Dollar remains under pressure for now and important levels have been broken over the past 24 hours. A daily close beyond these chart levels seems very realistic and this leaves room for further Dollar depreciation this week. The euro dollar as a result may move on towards 1.43 and Cable can exploit another 300 pips up to 1.6750, to the downside key support levels now lie at 1.4050 in euro to dollar and 1.6360 in the pounds to dollars pair respectively.

The dollar yen may simply stall here and wait for the next wave. As the movements in the YEN crosses has shown, the currency pairs can move around solely on the back of a falling (or rising) US Dollar, leaving the dollar yen untouched. However, medium term players are still keen on buying the Japanese currency for a move towards 90.00. On top, the risk seems limited and any short term spike through the 93.60 resistance level is likely to be sold off quickly. The 93.60 is the key level to watch, a move through should shift some medium term bears to reconsider their views for a fall through 90. For now the euro yen remains underneath the 131.35 key resistance, but if the GBP/JPY manages a break and a daily close above 152.50, this could confirm a further recovery.

Published on Wed, Jul 15 2009, 16:35 GMT

Currency Markets − Morning Report

Wed, Jul 15 2009, 08:38 GMT
by Anna Coulling

Master The Markets

Currency Market - Overnight Trading

The US Dollar is on the verge of breaking recent trading ranges and as a result adding some much need momentum to many of the major and cross currency pairs. The euro vs dollar was kept well bid throughout the Asian trading session above 1.3960, before moving swiftly higher to reach 1.4070 after Tokyo lunch. Cable mirrored the movement, remaining bid above 1.63 until resistance at 1.6360 finally gave way and the pair climbed to 1.6405. While the Euro has now only double topped the July high, Cable has reached a new high for July.

The dollar vs yen was side lined , remaining in a tight range just underneath key resistance. The currency pair did test the 93.60 level, but has so far failed to find much support. On the back of a rising Euro and UK pound, the Japanese yen crosses are both up with the euro vs yen trading at 131.35 and the pound vs yen as high as 153.30 this morning.

Currency Markets - Trading Outlook Today

The UK unemployment data for the month of May is due at 8.30GMT, and is forecast to show a slight rise to 7.4% from 7.2 previously. June CPI data and the Empire Survey for July will be released in the US later on today. The outlook for the US Dollar is bearish, and this tone may remain in place all day, especially if Cable threatens to move on higher from here. If the euro vs dollar manages to close the trading day above 1.4070 it may keep on moving higher. However, the current double top may remain in place and the 1.3850 / 1.4050 range may remain the dominant trading area.

For the dollar vs yen, 93.60 is the key level to watch, and a move through here should shift some medium term bears to reconsider their views for a fall through 90. For now the euro vs yen remains underneath the 131.35 key resistance, but should the pound vs yen manage a break and a daily close above 152.50, then this would further confirm a short term recovery.

Published on Wed, Jul 15 2009, 08:38 GMT

Currency Markets − Afternoon Report

Tue, Jul 14 2009, 15:32 GMT
by Anna Coulling

Master The Markets

Currency Markets - This Morning

The Dollar continued to trade lower in Europe, driven by rising European equity markets. The euro vs dollar initially traded lower on a slightly weaker than expected ZEW economic sentiment index. The pair traded down to the 1.3960 support which held, just to turn and extended its high to 1.4014 later on. Cable outpaced the Euro to lift the top to 1.6344, leaving the 1.6360 resistance intact for now. The dollar yen was kept in a small range of just 30 pips above 93.00, with the euro yen and pound vs yen attracting little interest so far today. Neither was able to break resistance levels on top and they remained in narrow ranges. The largest move today came from the Swedish crown, it lost close to 1% against the US Dollar immediately after lunch as the pair rallied to 7.88 from 7.82 earlier on.

Currency Markets - Market expectation

The US Dollar fended off attempts to push to lower levels for now, after the euro dollar was unable to attract fresh buyers above the 1.40 level. The pair is currently re-testing the days double bottom at 1.3960, a break there has lots of space down to 1.3800. Cable too failed to see additional buyers in mid morning and the pair stopped climbing ahead of the 1.6360 resistance level. While 1.6235 holds, it may attempt another rise later in the day. The risk lies to the downside, as a dip through 1.62 may cause a quick fall towards 1.6050.

The situation has remain unchanged in the dollar yen, whilst staying below key resistance at 93.60, the pair remain in negative territory and ought to trend towards 90. With strong resistance levels intact in both the euro yen and pound yen, there may be little appetite to try the upside for now and we see the risk in yet another large drop for the crosses as well. The Bank of Japan will hold its rate meeting tonight. No change in policy is expected for now, but it may be interesting to see whether the BOJ is following the US Fed and the British MPC to take a slightly tighter stance on monetary policy.

Published on Tue, Jul 14 2009, 15:32 GMT

Currency Markets − Morning Report

Tue, Jul 14 2009, 09:18 GMT
by Anna Coulling

Master The Markets

Currency Markets Overnight

Monday night saw the Dollar close low, with the euro dollar at 1.40, and the pound vs dollar trading at 1.6290, following a sell off in the currency,US after the Dow rallied nearly 200 points to close at a 14-day high. Early Asian traders picked up cheap Dollars, but they were unable to drive the euro dollar through support at 1.3965, positions were squared, and the pair returned to 1.40. The pound dollar has outperformed the Euro this morning, extending the top to 1.6305 a short while ago.

The dollar yen traded through 92.60 in late Europe and never looked back. Up to 93.10 at the end of the New York session, the pair held on to form a base at 92.80 and extend the top to 93.30 in Tokyo. We are now trading close to key resistance at 93.60. Both yen crosses rose strongly, the euro yen reached a high of 130.65 while the pound vs yen peaked at 152. Their moves were amplified by the weak Dollar. So far they remain underneath their key resistance levels of 131.30 ish for the EUR/JPY and 152.50 GBP/

Currency Market Outlook

Lots of market data this morning in Europe, starting with the German and European ZEW economic sentiment index for July. At 12.30 GMT US June Retail Sales and PPI will be released. Currency markets are likely to remain volatile. With both Euro and Cable threatening to lift the July top on one side and a growing sentiment that the GBP rise may be very overdone on the other, there should be lots of trading interests and volatility. For now the euro vs dollar 1.3850 / 1.4050 range persists, and for the pound vs dollar strong resistance lies above 1.6360, with support far lower at 1.61.

The dollar vs yen is trading in the 92.80 / 93.40 range but a test of 93.60 seems imminent. A fall lower would confirm a medium term outlook for a stronger Japanese currency. The euro yen and pound yen are close to their resistance levels, and a daily close above may scare the bears. On the other hand, the last days rally seem like an invitation to establish fresh short positions.

Published on Tue, Jul 14 2009, 09:18 GMT

Trading Currency − A Summary

Tue, Jul 14 2009, 07:49 GMT
by Anna Coulling

Master The Markets

The Dollar had a fairly volatile day in Europe today, but it remained range bound for most of the day, after the euro vs dollar closed at 1.3975 last Friday, it traded down to 1.3905 in Asia this morning, before rising as high as 1.3990 and once again retreating to 1.3910 a few minutes ago. Despite high intra-day volatility the pair remain inside the range set out last week, key support remains at 1.3850, strong resistance 1.4050. Cable only mirrored the Euro's movement to the downside, falling close to 200 pips during the morning's Asian session to hit a low of 1.6040 before recovering above 1.61. The pair has again come under pressure in European afternoon. The US dollar vs yen has re-tested last week's 91.80 support, from where it bounced to 92.50. Interest in the currency pair was low. The GBPJPY and EURJPY both held recent support levels.

With no economic data of importance today, the week starts on Tuesday, and looking ahead we expect tomorrows German/European ZEW Economic Sentiment Index to be a potential market mover, market analysts are looking for a slight improvement in July. The euro vs dollar is likely to continue holding its range between 1.3850 and 1.4050. The main threat is a break to the downside which may lead to 1.3660 in the short-term, with Cable remaining vulnerable and a clear break of the psychological 1.60 level may see the Pound drop off towards 1.55.

The dollar vs yen is holding low levels for now, but neither this nor the yen crosses have been able to climb back above old support levels, and for now we keep a bearish bias and would not be surprised if the Japanese currency takes a sudden leap higher.

Published on Tue, Jul 14 2009, 07:49 GMT

Currency Markets − Afternoon Report

Fri, Jul 10 2009, 16:03 GMT
by Anna Coulling

Master The Markets

Currency Markets Today

The Dollar was confined to small ranges in Europe today. For the opening level at 1.3910 the euro vs dollar rose to 1.3950 after the US trade deficit was reported lower at $25Bln. The preliminary Michigan Sentiment Index for July was also reported lower at 64.6 versus 70.0 in the previous month. Cable remained in an even tighter range, bouncing just 50 pips from this morning's low. The dollar vs yen and Yen crosses also remained in very narrow ranges with the former managing just 30 pips between 92.25 and 92.55 while the euro yen stopped its fall and recovered to 128.80 from 128.00 this morning.

The most active pair in Europe today was the euro vs Australian dollar, rising to a high of 1.7950 as the Aussie dollar failed to rally in synch with the euro dollar. The EUR/AUD cross now stands at the highest level in over 6 weeks, but the 1.80 price point may pose a psychological hurdle.

Currency Market expectation

For the reminder of the week trading is expected to slow and ranges are set to to hold. The euro vs dollar is currently right in the middle of its 1.3850 / 1.4050 range, but unless the pair closes the week above 1.40, I expect the pair to start with a slight bearish bias into the new week.For Cable the 1.60 / 1.6350 trading range looks strong.

The dollar vs yen remains bearish, now we have finally broken below the 94.00 floor, and this could fall through the 91.80 low and widen the downside towards 90.00 next week. The euro vs yen has strong resistance up at 130.00, and while this holds we can expect another attempt lower towards 122, whilst for the pound vs yen the main resistance lies at 150 and the risk here is a new round of selling to drive the pair closer towards 140 as the next target for the currency pair.

Published on Fri, Jul 10 2009, 16:03 GMT

Trading Currency − A Summary

Tue, Jul 7 2009, 11:28 GMT
by Anna Coulling

Master The Markets

Currency Markets Report

After a strong performance in late Europe, the Dollar has weakened overnight once again. The euro vs dollar rose to a high of 1.3940 after closing the day at 1.3860 in New York. Cable, which was temporarily trading well underneath the psychological 1.60 level in Europe, has since partially recovered and is currently trading in the 1.6125 price region. The biggest mover yesterday was he dollar vs yen, which dipped to 91.70 yesterday, the lowest level in 5 months. In Asia this morning the pair turned and recovering some of the overnight losses to trade back to the 93.30 level. As outlined earlier in the week, the move was mainly motivated through selling of the euro vs yen and pound vs yen. The pound yen which stood at 156 on Monday traded down nearly 10 big figures to reach a low of 146.90 in Europe before marking a strong return in Asia this morning. Presently at 150.10, the pair has risen more than 2% in just a few hours. The euro yen was slightly less volatile, but with a Monday-Wednesday drop from 134 down to 127 last night and subsequent bounce to 129.70 this morning, I still consider it as one of the more active pairs this week.

The Australian Dollar recovered marginally from its collapse last night. In a sudden drop in the European afternoon trading session, the aussie dollar shed more than 2% from 0.79 down to 0.7725 on the back of the general US Dollar strength. Overnight the AUD/USD has recovered to 0.7820 but the outlook remains rather bearish.

Currency Markets Outlook

The UK trade balance for the month of May is the first piece of big news today. It is forecast to improve only slightly over the previous months data deficit of some 7Bln GBP. Fear that the data will be weaker may halt any additional GBP gains till mid-morning.The US will release its weekly jobless claims, the data is expected to improve over last week's 614k to 605k this week. Besides the data, a number of Fed officials are expected to hold speeches or testimonies. We have had some interesting currency movements so far this week. The Yen crosses took the spotlight, breaking key support levels on Tuesday. Despite the strong rebound, both the euro yen and pound yen remain in negative territory and further selling occur in the next few days. This will weigh on the European currencies and I believe that the UK pound is especially vulnerable if it trades through 1.60 again in the short term.

Published on Tue, Jul 7 2009, 11:28 GMT

Currency Markets − Morning Report

Tue, Jul 7 2009, 11:13 GMT
by Anna Coulling

Master The Markets

Currency Markets Review

The euro vs dollar traded up to test resistance at 1.40 in late New York trading last night before Asia took the pair back down to the 1.3900 level once again. Cable too remained very much range bound, claiming back most of Mondays losses during the course of the New York session only to be sold off once again in the Far East this morning. The main driver for the US Dollar was Australia's RBA announcement to leave interest rates unchanged at 3%. This was in line with market expectations but the statement accompanying the decision confirmed that the present outlook is likely to point to further easing, despite considerable signs of strength coming from the Chinese economy.

The US dollar vs yen rebounded to 95.40 before the pair came under pressure midway through the Asian session. The USD/JPY is completely uncorrelated to the European pairs and great trading opportunities can currently be found in the Yen crosses. Both the euro vs yen, and pound vs yen are currently challenging important support levels and intra day volatility may rise quickly in the short term.

Currency Markets Outlook

UK industrial and manufacturing production was released lower than expected this morning. As a result, Cable saw a fall back to the days low of 1.6150 before bouncing on profit taking from eager buyers once again. I expect this afternoon to be fairly range bound in the absence of any important US data, with the euro vs dollar trading around 1.3930 with sellers lined up higher between 1.4050 and 1.4130. To the downside, 1.3880 is a strong area of initial support, and a break there may lead to 1.3760 in due course. Cable is likely to remain between 1.6160 and 1.6300 for now, here too there seem to be sellers waiting for better levels and the risk lies to the downside to attack the 1.60 level next. The dollar vs yen currently appears to be driven by the currency crosses. For now the 95.00 level is well supported, but a break there may lead to a larger movement lower over the next few weeks.

Published on Tue, Jul 7 2009, 11:13 GMT

Currency Markets − Afternoon Report

Mon, Jul 6 2009, 15:37 GMT
by Anna Coulling

Master The Markets

Currency Markets Today

The US Dollar opened the week on a strong footing with the euro vs dollar trading near the high of 1.3995 this morning in Asia, before Dollar buyers pushed the pair down to reach a low of 1.3880 at midday in Europe. Cable followed, but the move was amplified as the pair shed over 200 points from the 1.6328 top to fall as low as 1.6097. The main reason for the Pound's under performance can be found in the market's growing worries that the British financial bailout efforts are falling short on expectations, after recent data suggests that none of the major UK banks have been making use of the government guarantees since April.

The Japanese Yen was the strongest currency this morning with dollar yen shedding close to 100 pips from the day's high at 96.10. Heavy selling of the EUR/JPY and GBP/JPY contributed to the move, after traders reduced their long positions in the crosses. Views that the pre summer rally in EUR/JPY ran out of steam ahead of the critical 140 level and that a deeper correction may be on hand, were the driving factors, along with investors risk aversion sentiment which is now seen entering the broader markets.

Currency Markets - Outlook

Both, the euro vs dollar and pound vs dollar are currently trading at the lowest levels of the past few weeks. Over the course of the last 10 trading days, failure by the Pound and the Euro to rise up to higher levels has come with a reduction of bullish strategies. We have also noticed a number of major market making banks that have lowered their positive currency forecast in favor of a stronger US currency this summer.

Key economic data this week includes trade balance figures both the US and Europe, along with industrial production. The market will particularly be interested to see whether the situation in Europe shows any sign of additional weakness. The 1st quarter GDP estimate may underline the negative development, although I feel that data is old news, and should have only limited impact to the current situation.

The Swiss Franc is likely to remain under pressure. As recent SNB action has shown, keeping the euro vs chf cross above the psychological 1.50 mark is a declared task by the National Bank. Since intervening on June 24th, the EUR/CHF has shed roughly 50% of the gains made on that day, and in order to keep some upside momentum officials may consider additional intervention rather sooner than later.

The Japanese yen has been the strongest performing currency over the past few days. With a dollar vs yen low of 94.70 today, the pair has reached levels last seen in May. Strong support is seen at 93.85, a possible break through that level may trigger additional stop loss selling and drive the pair to the year's low at 87.30 in the medium term so there should be some opportunities for trend trading this pair in due course.

Published on Mon, Jul 6 2009, 15:37 GMT

Trading Currency − A Summary

Fri, Jul 3 2009, 15:58 GMT
by Anna Coulling

Master The Markets

Previous Currency Market Session Overview

The USD had a quiet overnight session with exceptionally light volumes in anticipation of the 4th July holiday weekend leaving only the European FX market active. NFP data came in far worse than expected, -467k against a forecast of -325k taking the unemployment rate to 9.5% versus an expected 9.6% - a small crumb of comfort, I am sure.

The US Dollar and Japanese Yen have tended to trade in an inverse relationship to levels of risk appetite. Both have tended to fall when equities rise as investors show a greater risk tolerance, but rise when investors exit riskier assets in the face of economic uncertainty or financial turmoil.

The Euro dropped through weekly support between the close of New York and the open in Asia yesterday reaching a low of USD1.3928 and so far the rate seems unable to hold the USD1.4000 price point. For any move higher the Eurodollar needs to register a weekly close of USD1.43.

British Pound traded down to support at a low of USD1.6301 avoiding a drop to USD1.6280 where most likely a large number a stops will be sitting.

USDJPY fell to a low print at JPY95.69 but buyers lifted the rate back to the 96.00 price point point reaching a high of JPY96.14 in two-way action.

Currency Market Expectation

Market volumes remain thin and potentially volatile with the US closed for the Independence Day holiday. USDJPY remains contained around the JPY96.00 area, where traders note expiry interest for the 1400GMT cut. Additional expiries seen placed at JPY96.50 and JPY97.00.

EURUSD continues to hold tight around USD1.4000, this level apparently reportedly holds the strike of an expiring option for the 1400GMT, and said to be for a decent size (US investment bank reportedly holds it). Offers remain in place from around earlier highs of USD1.4027, strengthening into USD1.4030/35 with stops above. Bids USD1.3980 ahead of USD1.3965, with bid interest dotted from this level and extending to USD1.3950.

The British Pound Pound recovery extended to USD1.6353 (76.4% USD1.6370/1.6300) before upside momentum faltered, with rate currently trading around USD1.6345. A move above USD1.6353 may allow for a push back toward that earlier recovery high but only a break and hold on the week at 1.66 will allow this pair to move forward.

Traders are likely to return to the markets on Monday with an altered perspective, possibly looking for further upside correction in the USD amongst further sideways consolidation, although the summer lull and thin trading volumes may also lead to some sharp and random price moves. Have a great weekend.

Published on Fri, Jul 3 2009, 15:58 GMT

Currency Markets − Morning Report

Fri, Jul 3 2009, 08:10 GMT
by Anna Coulling

Master The Markets

Currency Markets - Yesterday & Overnight

Across the foreign exchange markets, the weaker than expected NFP payrolls data prompted a surge in risk aversion, with the U.S. dollar rising against the euro but falling against the Japanese yen, however, some of these moves have now been reversed in Asian and early European trading. The US dollar rose back slightly against the yen in Asia Friday after tumbling yesterday on weak U.S. jobs data, boosted by demand from Japanese players investing in overseas assets. However many traders feel that the U.S. currency's recovery may be temporary, and if it begins falling again later in the session, a thin market due to a U.S. holiday could exaggerate any move and add volatility and uncertainty into the markets, which is often the case when markets trade on low volumes.

The euro ended Thursday down against most of the majors, gaining only against the commodity dollars, after the European Central Bank left rates unchanged at 1.00 percent, as expected, for the second straight month. ECB President Jean-Claude Trichet said that "current rates are appropriate" and that recovery is expected in mid-2010, but at the same time, he said later on in an interview that rates may not be at their "lowest" level, suggesting that the ECB feels that they may have room to reduce rates further later in the year.

The British pound was lower against the dollar after dovish comments from a Bank of England policymaker and continued concerns about the economy. BoE policymaker Tim Besley said it was too early to judge when the central bank will need to start withdrawing the massive stimulus it has delivered. Data showed that an index on purchasing managers' survey on UK construction activity fell to 44.5 in June.

The Australian dollar was weaker late Friday, although above its lowest level, after the weaker than expected U.S. jobs data eroded much of the positive sentiment that has supported the high-yielding currency.

Currency Markets - European Trading Session

European stocks are expected to open marginally higher Friday, as investors chase bargains after Thursday's hefty losses, however, the U.S. holiday is likely to limit activity. For the euro vs pound support is noted at 0.8525/20, though not disregarding the overnight low at 0.8527, a break below 0.8520 could open a deeper move toward 0.8500 later today. Resistance is seen placed at 0.8545/50 ahead of 0.8565/70 and 0.8580.

For the UK Pound, offers are seen placed between USD1.6430/35 (USD1.6433 50% USD1.6545/1.6323), a break here could open a move toward USD1.6460 (Europe high Thursday/61.8%) ahead of USD1.6490/00. Support remains toward USD1.6320, a break to open a deeper move toward USD1.6280, with stops noted through USD1.6275/70.

Trading in the euro vs dollar will be thin, due to the US market holiday, and there is talk that a large Asian bid is seen placed around the USD1.3990 level. Offers seen placed toward USD1.4030 USD1.4027 recovery high NY/USD1.4032 38.2% USD1.4202/1.3927) with stops above USD1.4035, which if triggered to open a move toward USD1.4080/85 ahead of USD1.4100. Support is seen placed around USD1.3990, and a break below could open a deeper move toward USD1.3960/50 ahead of USD1.3927 and stronger area between USD1.3920/00.

If U.S. economic worries and higher risk aversion cause the dollar to reverse course against the yen later in the day, a key point to watch will be the JPY95.00 level, according to traders who suggest that "there are automated stop loss selling orders placed there, and if a dollar fall triggers those, the currency could quickly hit JPY94.50 in a thin market" - we will see later today!

Despite the fall in the Australian dollar, analysts say they don't expect it to move outside its recent trading range unless there is further weak fundamental news today, either in the U.S. or locally.

Published on Fri, Jul 3 2009, 08:10 GMT

Currency Markets − Morning Report

Thu, Jul 2 2009, 08:22 GMT
by Anna Coulling

Master The Markets

Currency Markets - Yesterday & Overnight

The dollar made slight gains against the euro and was steady against the yen in Asian trading Thursday, sticking to narrow ranges ahead of key U.S. jobs data later in the global day. The dollar was trading at JPY96.60, just a single tick above JPY96.59 in late North American trading on Wednesday. Earlier in the day, the U.K.'s Daily Telegraph newspaper reported that Russian banks may need to raise USD60 billion in fresh capital to cover an increasing number of bad loans, citing a Fitch Ratings analyst.

Yesterday, the Euro tested USD1.4000 but managed to shrug off heavy pound vs dollar falls post the dreadful GDP data. EU inflation fell 0.1% y/y in June, whilst German Unemployment rose to 8.3% as expected. The Euro found good buying interest as China purchasing mangers' index for June rose to 53.2 from 53.1 in May, consolidating the fourth month in a row above the watershed mark of 50.

The British pound fell against the dollar after the previous day's unexpectedly sharp downward revision to UK GDP continued to hamper the currency. The purchasing managers index rose to 47.0 in June from 45.4 in May. The UK also recorded a bigger than expected current account deficit of GBP8.540 billion in the first quarter.

The Canadian dollar strengthened against the dollar as crude oil prices rebounded back above USD71 per barrel, helping the commodity-linked currency. The Australian dollar was marginally stronger in Asian trade late Thursday as support provided by stronger equities performance was eroded by a wider than expected blowout in the trade deficit. The currency is now close to the middle of the recent range it has held in past weeks and is expected to tread water ahead of the release of the U.S. non-farm payrolls data for June later Thursday.

Currency Market Outlook Today

With the market remaining bearish on the euro, it may decline further in the thin flow market ahead of the three day weekend in the U.S. that starts with Independence Day on Friday. The Australian dollar and the euro are what some players call "riskier currencies" and they tend to move in the same direction against the dollar.

Euro sterling, which had been correcting away from its New York high at 0.8596 through the Asian session, easing from stg0.8586 to stg0.8565, spiked higher to make a brief show above 0.8600, touching 0.8601 before easing back to currently trade around 0.8588. This move may allow cable to recover back to current levels around USD1.6440, but is expected to meet resistance on the approach to 1.6450. A break above here may open a move back to USD1.6480 ahead of a stronger area around 1.6500. Support remains in place at USD1.6410/00.

The euro vs dollar is adding to earlier reports of demand placed between 1.4100/80, trader's note that stops are building in the area between USD1.4080/70. Further demand is seen placed toward USD1.4050 with reports of more stops below.

Published on Thu, Jul 2 2009, 08:22 GMT

Trading Currency − A Summary

Wed, Jul 1 2009, 18:30 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session

The US Dollar sold off Wednesday morning on gains in European stocks and positive US stock futures, which boosted risk appetite and the higher yielding currencies. The Euro and British Pound pound gained to session highs, USD1.4122 and USD1.6492 respectively. However, during the session EURUSD fell back as the bulls were unable to sustain the move higher.

Markets in Canada are closed for a national holiday - Canada Day.

The Japanese Yen is weaker side following the June Tankan survey from the BOJ, which although showed an improving picture was nevertheless below expectations. The outlook for capital expenditure was particularly weak.

Currency Market Expectations

The recovery in the British Pound extended to extended to USD1.6540 before momentum faltered, with rate slipping back in line with Eurodollar as Euro-Sterling holds steady at around stg0.8568. Support seen back at USD1.6505/00, any break below may allow for a deeper move toward USD1.6480.

USDJPY has deflated steadily with Dollar losses elsewhere although at a slightly slower pace as EURJPY retains a bid tone below the earlier high. Dollar found thick supply ahead of JPY97.00 and likely some weak longs have now thrown in the towel after bids at JPY96.60/50 area were absorbed. Further demand eyed ahead of JPY96.00.

EURUSD stalls for now shy of USD1.4150 area of mentioned supply, the Tuesday high area and technical resistance. USD1.4200 has barrier strike and ahead of that the June 11th high of USD1.4175 seen as resistance.

Published on Wed, Jul 1 2009, 18:30 GMT

Currency Markets − Morning Report

Wed, Jul 1 2009, 08:09 GMT
by Anna Coulling

Master The Markets

Previous Currency Market Session Summary

The Dollar rose to near two week high against the Japanese Yen reaching JPY97.00 in Tokyo Wednesday as Asian traders followed US players in dumping Euros and Yen for Dollars. In stretching towards JPY97.00 buying order were triggered at JPY96.50. Market focus with US Employment Data muted any impact from the Bank of Japan's Tankan Survey which showed sentiment amongst large manufacturers not improving as much as expected.

The Euro gave up its early gains, shedding over 1.5 cents from highs at USD1.4150 following the release of US economic data. Traders and investors remain cautious as they await the European Central Bank meeting and unemployment data due Thursday.

British Pound experienced a volatile session trading as it reached a new high for 2009 supported by a report that UK housing prices rose slightly in June. However, Cable collapsed in reaction to confirmation that UK Q1 GDP contracted at its fastest in 51 years.

The Canadian dollar dipped against the US dollar following the release of Canadian GDP. GDP fell -0.1% in April, the 9th straight month of declines.

Weakness in global stock markets and poor domestic housing data triggered selling in the Australian dollar in the Asian session late Wednesday. Trade in the currency is likely to be choppy as it negotiates an obstacle course of key economic data, both domestic and offshore, in the next few trading sessions.

Currency Market Expectation

Although the Euro is little changed against the US Dollar it will face selling orders around USD1.4150 but both currencies are gaining against the Japanese Yen while Cable is mired in ranges against the majors. Traders appear to be returning to the safe haven of the US Dollar in advance of June US employment data.

Ahead of this data the US currency is likely to remain stuck in a narrow range capped at around JPY97 for the rest of the day.

European stocks are expected to open higher Wednesday, with investors determined to start the new month and quarter looking for bargains after Tuesday's sell off.

For the euro vs dollar any break at USD1.3900/80 could allow for a deeper move towards USD1.3970 and with resistance at USD1.4045/60 (USD1.4058 38.2% USD1.4153/1.4000) any break above would open a move towards USD1.4090/00 (USD1.4095 61.8%) ahead of USD1.4120.

The UK Pound is dropping to a low of USD1.6383 (USD1.6384 38.2% USD1.5800/1.6745) although the rate has since recovered. Any break of the USD1.6425 price level may open a move toward USD1.6445/50. Below USD1.6380 the rate can extend downwards toward USD1.6350.

Published on Wed, Jul 1 2009, 08:09 GMT

Trading Currency − A Summary

Tue, Jun 30 2009, 17:27 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

The dollar started to weaken against the Euro from the early Asian session, with the pair finally breaking important USD1.4130. Dollar weakness mainly due to risk appetite seen across all markets and especially in commodities, as oil reached yet another multi week high above $73 per barrel. Equities, however, have experienced mixed fortunes with Europe down slightly and UK's GDP figure posting the worst number since the late 1950's. In the US the S&P Case-Shiller Home Price Index 20 city composite fell 18.1% in the year ended April against economists' forecast of a 18.6%. The 10 city composite dropped 18% in April.

The EURUSD is trading to the upside once again with yesterday's Dollar rally fading even as risk aversion creeps back. Dollar needs to hold key levels against both British Pound and Euro of USD1.4 and USD1.66 if moves to the upside are to be maintained. The next level for the Euro is USD1.4160 and any break and hold above puts USD1.4230 back in the frame.

Currency Market Expectation

EURUSD losses extend through USD1.4035 now as earlier mentioned bids and stops are taken out and traders' sights turn to the London fixing. However, flows may be balanced with Q2 squaring of positions.

British Pound pressing lower again, extending into areas of support between USD1.6515/00 (USD1.6505 76.4% USD1.6430/1.6745). A break below this level figure could open a deeper move toward USD1.6485/80 ahead of USD1.6470.

EURJPY is taking a hit with equities on the back of the US data, with bids emerging in the JPY135.30 area to cushion the fall. Ahead now lie the high risk events of Thursday, including US Non Farm Payroll colliding with the European Central Bank policy meeting and statement so traders may now be squaring their long Euro positions, which were built when the market had a bigger appetite for risk.

Published on Tue, Jun 30 2009, 17:27 GMT

Trading Currency − Morning report

Tue, Jun 30 2009, 08:36 GMT
by Anna Coulling

Master The Markets

Currency Markets Update

The yen gained moderately against the dollar and euro in Tokyo Tuesday as Japanese players bought the currency for month end settlement and the half year's repatriation of their overseas assets for bookkeeping, but ahead of the Bank of Japan's Tankan survey, a closely watched quarterly business sentiment report, due Wednesday, currency traders and investors are unlikely to make big bets on the yen before the release. For that reason, any further falls in the dollar and euro later in the day will probably find a floor around JPY95 and JPY134.80 respectively.

On Monday, the euro vs dollar mostly tracked the price action on the stock markets. European stocks opened in negative territory but investor sentiment improved later in the session. The euro to dollar trended higher for most of the day and closed the session at USD1.4083, compared to USD1.4056 on Friday evening. This constructive global sentiment persisted in overnight trading as the EUR/USD is currently trading above the USD1.41 price level in the early European session.

The British pound fell to as low as USD1.6430 against the U.S. currency after comments from Zhou, however, it rose in tandem with the euro and hit an intra day high of 1.6587 in late New York afternoon.

The Australian dollar was stronger in late Asian trade Tuesday supported by a further improvement in risk appetite in global asset markets that weighed on safe haven assets like the greenback. The rally in the Australian currency defied the release of worse than expected domestic credit aggregates data that showed business lending slowing to a trickle.

Currency Market Outlook European Trading

The euro, yen and U.K. pound are all higher against the dollar on Tuesday, as forex players look to the stock markets for some inspiration.The UK Pound eased off ahead of the European open to USD1.6610 but soon picked up fresh demand interest into Europe. Release of stronger than expected nationwide house price data provided the added boost to spike the rate through USD1.6660/65 and on to USD1.6702. Profit taking then eased the rate back to USD1.6580 before secondary buying lifted it again, taking it on to USD1.6732. Offers are seen placed at USD1.6750 ahead of USD1.6800. Bids placed at USD1.6680, USD1.6660/50.

Strong spike higher in cable on housing data has lifted the euro vs dollar back to USD1.4125, but sales of euro sterling are seen acting as a counter weight. Offers remain in place at USD1.4130/40, a break here could open a move toward USD1.4180 ahead of USD1.4200. Support remains between USD1.4100/1.4095, with stops on a break of USD1.4090. Further bids noted toward USD1.4070 ahead of USD1.4055/50.

Traders will be watching the U.S. non-farm payrolls report for June due Thursday, with many economists expecting the report to show 350,000 jobs shed in June, compared to a 345,000 contraction in May. If the numbers are worse than expected, then the data could weigh on share markets, encouraging players to buy the yen, which they consider a safe haven asset.

Published on Tue, Jun 30 2009, 08:36 GMT

Trading Currency − A Summary

Mon, Jun 29 2009, 15:08 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

We start another week with a slightly stronger USD, this time helped by Chinese officials announcing that they are prepared to stay with the greenback as the reserve currency for the time being in the face of market rumours suggesting that they (and others - Russia & Venezuela to mention but two) have been looking for an alternative. Despite this vote of confidence the euro vs dollar currency pair is trading in a very narrow range and is little changed from last week's levels. Trading volumes are thin in this holiday shortened week as a combination of the summer lull and 2nd Quarter position squaring and reconciliation kicks in keeping many traders on the sidelines. The result is EURUSD unable to move much below USD1.4040.

In the UK both net lending and mortgage approval data came in below expectation which led to some early downward pressure on the British Pound. However, any pullback is being seen as a buying opportunity with the pair so far touching USD1.6550. A weekly close and hold above 1.66 still needed as evidence for a sustained move higher.

Currency Market Expectation

With an economic calendar almost devoid of any significant data traders are focusing on the ADP report of Wednesday and the NFP which, because of Friday's 4th July celebrations, will be released on Thursday. With the release of the ADP the market can begin speculating and moving.

The other important event of the week which traders are waiting for is the ECB's interest rate decision and subsequent statement from Jean Claude Trichet. This is probably the most eagerly awaited as Trichet should give the market some clear signals for the future direction of the EURO.

Published on Mon, Jun 29 2009, 15:08 GMT

Currency Markets − Morning Report

Mon, Jun 29 2009, 08:52 GMT
by Anna Coulling

Master The Markets

Currency Market - Morning Update

The US dollar rose against the Japanese yen and euro in Asia Monday, after comments from China Sunday suggested that the country would not change its policy of keeping the dollar as its key foreign reserve currency for now. The markets took the remarks as a sign that the dollar will continue to keep its role as a major reserve currency, prompting short term investors and hedge funds to buy the U.S. dollar, as a sign of renewed confidence. On Friday, the PBOC issued a report that mentioned the need to create a new reserve currency, raising concerns in the market that China would shift out of dollar assets sooner than expected. The dollar climbed more than a third of a yen to 95.59 from its level in New York Friday, before giving up some of its gains. Profit taking and a modest slip in risk appetite weighed on the Australian dollar in late Asian trade Monday, although the currency has held close to the psychologically key USD 0.80 mark.

On Friday, the euro reaped the benefits of the weakening US dollar as investors fled the safe haven currencies. The euro climbed over 1%, heading toward a two-week high of USD1.4139 hit earlier this week. Cable surged from 1.6375 to 1.6498 in European opening with traders citing short covering ahead of the weekend and the pair received another boost after the release of U.S. data. Sterling rose to as high as 1.6564 and ended the session at1.6521. The Canadian dollar broke out of its range against the U.S. currency, boosted by firm commodity prices and a revival in investors' thirst for assets perceived to be riskier.

Currency Market Outlook - European Trading

Traders have been moving to sell the euro in a thin market Monday, with dealers in Singapore saying that sovereign names were spotted selling the euro. Some dealers are looking to buy the euro off its lows, while the major currency pairs continue to trade in narrow ranges this morning in early market trading. The dollar and euro are slightly higher against the yen, while the U.K. pound is mixed.

Looking ahead to later today, the US dollar may continue to move in the 94.80 to 97.00 USD/JPY trading range once again, before Thursday's U.S. June non farm payrolls index, a closely watched indicator of the health of the U.S. economy, which may finally inject some much needed direction into this lack lustre pair. Ahead of the data, yen selling pressure from Japanese mutual funds for portfolio adjustment may offset exporters' yen buying to close accounts at the end of June.

For the euro vs dollar support is now seen at 1.3980/70 (USD1.3976 61.8% USD1.3887/1.4119), and a break below could expose stops, which if triggered may allow for a deeper move toward USD1.3945/40. Resistance remains in place at USD1.4040/50.

Trader's note that the UK pound has found support at 1.6443 corresponding to a 61.8% retracement of the move up from USD1.6368 to USD1.6564. Support remains in place to USD1.6435 with stops below USD1.6430, with next support interest level now seen at USD1.6415, with interest extending toward USD1.6400.

Published on Mon, Jun 29 2009, 08:52 GMT

Trading Currency − A Summary

Fri, Jun 26 2009, 10:44 GMT
by Anna Coulling

Master The Markets

Currency Markets - Yesterday & Overnight Asia

The euro rose against the US dollar and Japanese yen in Asia Friday, as firm Asian stocks and higher crude oil prices led short term investors to buy riskier currencies, such as the euro. Yet according to many currency traders, the single currency's outlook remains uncertain against other major currencies. It risks falling to 132.00 against the yen, and 1.3850 against the US dollar in the short term, if upcoming U.S. economic data misses forecasts, adding to concern about the global economic outlook and hurting demand for the euro and other relatively risky currencies.
Traders are now suggesting that recent rises in oil prices have been one of the drivers to buying riskier currencies, saying growing demand for petroleum mirrors improvement in the global economy.

The US dollar index lost surprisingly little (-0.2%) given the decent equities performance. The euro dipped to 1.39 yesterday, with minor support during London, and then bounced to 1.40 with Euro zone industrial new orders were weaker than expected. The Swiss National Bank was said to have intervened again, producing only a brief spike in the euro vs chf during the London morning trading session. The British pound fell sharply against the US dollar during European trading, but made some headway in the US trading session thanks to a broad revival in risk appetite. There was no UK economic data on hand, but there were signs of turmoil in the relationship between the UK Chancellor of the Exchequer Alistair Darling and the Bank of England. Firmer risk appetite lifted the Australian dollar in Asia Friday as analysts tipped rising stock markets to continue steering high yield currencies and bond prices offshore.

Currency Markets - Outlook London Session

The euro is rallying against both the dollar and yen in early trading this morning, with many currency traders suggesting that a large British bank has bought the euro on behalf of an Asian central bank. The euro vs dollar eased back ahead of the European open, the correction extending to 1.4025, and currently trading around 1.4058. Offers remain in place at 1.4060/65, a break above here could open a move toward 1.4080 (76.4% USD1.4139/1.3888) ahead of USD1.4100/10 and USD1.4140/50. Bids USD1.4025/20, a break may allow for a move to USD1.4000 ahead of stronger interest at USD1.3985/80 and USD1.3955/50.

For the euro vs pound offers seen placed at 0.8572, a break above to open a move toward 0.8580 ahead of 0.8600. Support is seen placed at 0.8550 ahead of 0.8530/20.

Cable pulled back to 1.6370 ahead of the European open before picking up fresh demand interest which has taken it back to the current level between 1.6425/35. Offers remain in place toward 1.6450, a break above to open a move toward stronger interest placed between 1.6460/70, with a possible re-test of the strong resistance in place at 1.66 longer term. A break above here would open further bullish momentum in the pair. Stops noted through 1.6470/75, which if triggered could open a move toward 1.6500 ahead of stronger area toward USD1.6520.

European stocks are seen opening higher Friday, boosted by expected gains in the heavyweight resources sector, although unlikely to muster similar momentum as U.S. counterparts.

On Friday morning, the Commerce Department is anticipated to say that both personal income and personal spending results for the month of May improved by 0.3 percent. That said, traders should be skeptical of the income result as past increases have been purely the result of rising transfer payments, which include retirement, disability, and employment insurance, while wage and salary compensation has either fallen or stagnated since September 2008.

Published on Fri, Jun 26 2009, 10:44 GMT

Currency Markets − Morning Report

Thu, Jun 25 2009, 08:24 GMT
by Anna Coulling

Master The Markets

Currency Market News - Yesterday & Overnight

Higher Japanese stock prices and a positive outcome from the Federal Open Market Committee meeting overnight lifted risk appetite in the financial markets, giving a boost to the dollar and euro which were both up against the yen in Asia Thursday. Some investors had expected the FOMC might increase its future Treasury buying to support the U.S. economy, which is usually a negative factor for the dollar as the nation's interest rates decline. So far in Asia, Japanese importers and security firms and non Japanese commodity trading advisers were seen selling the yen in favor of the dollar, euro and Australian dollar. The euro continues to be the grand benefactor of the dollar's weakness, strengthening yet another percent against the USD in overnight trading, and in addition is also stronger against the Swiss Franc and British pound following the SNB's possible intervention. Sterling was well supported by investors, but USD strength won in the end pushing the pair from USD1.6600 to USD1.6400 late in the US session. The lack of expansion in US Treasury Buying from the FED supported the dollar post the FOMC statement, while the euros to pounds pair slipped back under 0.8500.

Upbeat assessments on the domestic economy and firmer equity markets lifted the Australian dollar in Asia Thursday, while interest rate futures slumped dangerously close to key support levels, a breach of which could set up further losses.

Currency Markets - Outlook Today

Both the euro and dollar are higher against the yen on Thursday, with traders citing yen sales by Japanese industrial companies following the Fed meeting in the US last night. It seems likely that the US dollar may rise for the rest of this week, according to many dealers and traders, largely as a result of the FOMC not taking additional stimulative measures, such as boosting its Treasury purchase program.

European stocks are expected to open marginally weaker Thursday, with investors happy to book some profits following Wednesday's gains following the conclusion of the latest rate setting meeting from the Federal Reserve. Renewed euro yen demand emerged, this time lifting the euro dollar to a session high of USD1.3976 before settling back within 1.3950/70 price level into the European session. The rate is currently trading around 1.3965 with some seeing potential for a further corrective recovery in the rate later in the morning. Offers are seen placed at 1.3975/85, and a break above could open a move toward 1.4000/05, with stops placed on a break of 1.4010. Support is seen placed at 1.3925/20 ahead of 1.3910/00 and the New York session low at USD1.3888.

The euro pound, which had consolidated Wednesday's corrective pullback by holding under0.8500 between 0.8480/93, has edged back above this figure as sterling continues to pare recovery gains. Cable support is seen at 1.6405/395, and a break here could allow for a deeper move toward 1.6370, with demand from this level extending toward 1.6350. Resistance is seen placed at 1.6470/80 ahead of 1.6500/10.

The pace of the dollar's climb, however, is likely to be slow as most currency traders and dealers are likely to be unwilling to make aggressive bets ahead of the non farm payrolls data and business activity indexes from the Institute for Supply Management due next week. Later in the global day, attention returns to other fundamental news items, and in particular the U.S. weekly jobless data, and if the figures show an improvement and push up U.S. stock prices, the dollar may extend its rally further this afternoon.

Published on Thu, Jun 25 2009, 08:24 GMT

Currency Markets − Morning Report

Wed, Jun 24 2009, 08:39 GMT
by Anna Coulling

Master The Markets

Currency Markets - Yesterday & Overnight

The US dollar ended sharply lower after global risk sentiment turned positive again Tuesday, sending the U.S. currency to a succession of multi week lows against currencies such as the euro, yen and Swiss franc. The US dollar's fall emerged out of a greater appetite for risk following a more risk averse climate Monday. Investors and market players have been prone to erratic mood swings recently, and their relatively "sunnier dispositions" Tuesday were reflected in higher crude oil prices and U.S. equity prices that wavered narrowly between positive and negative territory throughout the day. The healthier risk environment was also supported by more encouraging economic data from the U.S. and elsewhere. U.S. existing home sales rose in May for a second month in a row, and the Federal Reserve Bank of Richmond indicated an improvement in the manufacturing sector. In the euro zone, the latest German consumer confidence and euro zone purchasing managers' surveys were taken as evidence that the worst of the downturn has passed, supporting risk appetite out of the safe haven dollar.

Comments from European Central Bank officials have also been helpful for the euro, as ECB Governing Council member Guy Quaden said the euro zone's economy will be "less bad" for the rest of the year before improving progressively in 2010, and fellow ECB council member Axel Weber said the central bank has done enough in terms of easing. This is often referred to as 'talking up your book' - something the ECB is very good at! Although these developments helped global risk appetites to recover, the magnitude of dollar losses versus the euro and some other currencies was somewhat disproportionate Tuesday, testifying to the still volatile and jittery tone in currency markets in the absence of a firmer and more durable directional trend. The US dollar sold off sharply in early trading, and then extended its losses as European traders began exiting around midday, in the process sending the dollar to its lowest level in over a week against the euro, and to three week lows versus the yen and the Swiss franc before a modest recovery toward the end of Tuesday's session.

Currency Market - Trading Outlook Today

The dollar and euro gained slightly against the yen in Tokyo Wednesday as Japanese trust funds bought these currencies to purchase overseas assets. Anticipation of such investments, which the trust funds regularly make at month's end, prompted some short term currency traders to buy the dollar and euro earlier in the morning. However many traders suggested that the scale of the dollar and euro buying was relatively small and unlikely to send the currencies significantly higher later in the day. Most players were reluctant to make big bets, particularly on the dollar, ahead of the U.S. Federal Open Market Committee meeting scheduled for later in the trading day. This is largely because the FOMC statement is expected to contain few dollar positive cues, as it seems to be more cautious about the prospect of an economic pickup than traders and investors. That would also confirm the view that the Federal Reserve will take more time before deciding to end its ultra low 0-0.25% policy interest rate. Should the FOMC statement emphasize lingering downside risks to the economy, as expected, that could also put short-term downward pressure on long term interest rates. Many traders and speculators are expecting the dollar to weaken further weaken against the yen as Japanese firms repatriate overseas earnings ahead of the half year end at the end of June.

Published on Mon, Jun 22 2009, 14:08 GMT

Currency Markets − Morning Report

Mon, Jun 22 2009, 08:27 GMT
by Anna Coulling

Master The Markets

Currency Markets Friday & Asia Overnight

The Japanese yen advanced against the dollar and euro in Asia Monday as traders took profits on riskier currencies, taking their cue from lack luster Japanese stock markets, while adjusting positions before the coming Federal Reserve policy meeting. As a result the yen rose about a third of a yen to 95.78 against the US dollar from New York late Friday, and almost one yen against the euro to 133.17. Japan's benchmark Nikkei 225 Stock Average index fell into negative territory several minutes after it opened which prompted short term investors to cut exposure to currencies that are considered riskier than the yen, including the dollar and the euro.

Euro rose versus the U.S. currency as a batch of recent upbeat data boosted hopes that the global economy is on the path to recovery. As the risk appetite of investors improved, the euro jumped to an intra day high of 1.4013 on Friday versus the greenback at the close of European session, before retreating partly due to the sell off in crude oil prices. The British pound pushed higher during the day, despite the release of weak UK retail sales data and after minutes from BOE's last policy meeting confirmed a unanimous vote to keep rates on hold at 0.5 percent.

The Canadian dollar pared gains against the dollar after government data showed retail sales falling 0.8 percent in April. The loonie did manage to hold on to its recent levels as oil prices held close to $72 a barrel.

The Australian dollar fell in Asia Monday and is tipped to drop further as traders unwind expectations for interest rate hikes, while longer dated government bond prices led a sharp rally in interest rate futures.

Currency Market Outlook - European Trading Session

The euro is lower against the U.S. dollar and the Japanese yen, but overall the currency majors are sticking to tight trading ranges. All eyes are now on Germany's June IFO business climate index, due later, with no major U.S. data on the economic calendar.

The UK Pound has moved below the Asian base at 1.6447, with the rate dropping further to 1.6415 as the euro vs pound pair snaps back from early lows of 0.8423 to 0.8435. Cable is currently holding around the $1.6425 level. Support is now seen placed from this level, with stronger interest noted toward 1.6400. A break here could open a deeper move toward 1.6380 ahead of 1.6360/50.

The euro vs dollar is drifting lower again, getting an added nudge lower into early Europe, which has seen the rate probe below the Asian base to 1.3860 at writing. Demand seen placed to 1.3870, a break below could open a deeper move toward 1.3850 (USD1.3849 61.8% USD1.3748/1.4013), USD1.3825/20 ahead of USD1.3810/00. Offers seen placed at USD1.3920, more toward USD1.3960.

European stocks are expected to open just lower Monday, as bulls start the week on the back foot amid doubts about the strength of any potential global economic recovery.

The Australian dollar may struggle to hold above the 0.8000 level in the near term, partly on the paring of rate hike views, but also as the domestic economy may yet show signs of renewed stress as the effects of fiscal stimulus wears off. Many traders and market participants are particularly interested in what the Fed may have to say on the U.S. economic outlook, the bank's policy stance and recent rises in U.S. Treasury bond yields. If the Fed decides to buy more U.S. Treasury securities, that could hurt the dollar versus the yen and euro by raising concern over problems that could stem from the central bank's further financing of government deficit.

Published on Mon, Jun 22 2009, 08:27 GMT

Currency Markets − Afternoon Report

Fri, Jun 19 2009, 18:46 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Overview

The Japanese Yen and USD are down against riskier rivals Friday morning after market sentiment picked up on stronger crude oil prices and equities. However, trading has been both volatile and range bound, indicative of the market's uncertainty ahead of next week's Federal Open Market Committee meeting.

Euro's overnight gains are slipping into the NY morning session and with no significant data release scheduled for today, quiet and volatile trading is likely to prevail in thin market conditions.

Stronger risk appetite on Friday emerged following US Treasury Secretary Timothy Geithner remarks in an interview with PBS (the American Public Broadcasting Service) on Thursday where he said he saw some signs of stability in the economy and healing in the financial system. Markets must be desperate if they are moved by such anodyne comments. However, encouraging US data Thursday also helped, including a rise in the CB index and the Philly Fed manufacturing index.

Friday morning in New York, the Euro was at USD1.3913 from USD1.3894 late Thursday, while the USD was at JPY96.83 from JPY96.62. The Euro was at JPY134.69 from JPY134.22. The British Pound was at USD1.6444 from USD1.6341, while the Dollar was at CHF1.0856 from CHF1.0868.

Currency Market Expectation

Analysts say traders are looking for a fresh catalyst, given that it appears that the global recession may be ending even though growth is still some way off. Possible contenders include next week's FOMC meeting, US Housing Data, Treasury Auction of USD104bn of 2, 5 and 7 year notes plus a one year refinancing operation by the ECB (European Central Bank). Market will be particularly sensitive to comments and any loose talk.

Sterling is likely to outperform in the coming weeks, as traders have used the recent decline as opportunity to buy into the market, although cable's failure to extend recovery though USD1.6480 did at one point see spec longs pare back their positions. Rate now trading at USD1.6505 after challenging support between USDF1.6425/20. Dips appear to be attracting fresh demand seen attracting fresh demand with rate able to lift on to USD1.6515 at writing with possibility of break to USD1.6520. Any pullback towards USD1.6420 could allow for a deeper move back towards USD1.6400/1.6390 and further down to USD1.6350/40 and then on to USD1.6305/00. ROC holding up well.

Published on Fri, Jun 19 2009, 18:46 GMT

Trading Currency − Morning Report

Fri, Jun 19 2009, 08:32 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading Yesterday & Overnight

The euro rose slightly against the yen and dollar in quiet Asian trading Friday as regional stocks ticked up, encouraging speculators to buy back riskier currencies such as the European currency. However many traders were suggesting last night that the gains seen in the euro were too small to be meaningful, and as a result most currency players were staying on the sidelines ahead of the weekend. Even so, some investors took a cue from rising Asian stocks to buy the euro against the less risky but lower yielding Japanese yen and US dollar, with the euro climbing a third of a yen to 134.55 from New York overnight, while gaining a third of a cent against the US Dollar to trade at 1.3921.

On Thursday, the euro vs dollar maintained an almost perfect sideways trading range, oscillating between 1.3900 and 1.4000,during the European trading session. The better than expected Philly Fed survey pushed stocks higher with the euro vs usd testing offers in the 1.40 price area. However, there was no follow through, and the pair gave up much of its gains later in the session despite stocks holding up well, with the pair dropping temporarily below the 1.39 mark.

In the UK, the British pound fell against the dollar and hit a one week low against the euro, after data showed UK retail sales unexpectedly fell, raising doubts about the 'hoped for' economic recovery. In recent weeks sterling had surged on expectations that the UK economy would quickly emerge from its deepest recession in decades, however yesterday's data raised severe doubts, with UK retail sales falling 0.6% in May, against a forecast of a 0.4% gain, 1.6% lower than last May.

The Canadian dollar edged higher against the U.S. dollar after domestic inflation data showed annual inflation slowed in May but was still higher than market expectations.

The Australian dollar enjoyed a boost in Asia Friday, helped by an improved risk appetite and weaker U.S. dollar, while interest rate futures plunged on rising oversupply concerns.

Currency Markets - Trading Outlook This Morning

The euro is slightly higher against the dollar, yen and pound on Friday as markets see a slight up tick in willingness to build exposure to risk. Currency traders are suggesting that the major currency pairs are showing some flows into risk exposure after surprisingly strong U.S. economic news raised hopes that the economic recovery may be taking root in America. The single currency's short term outlook rests on events next week, such as the two day Federal Open Market Committee meeting starting on Tuesday and the release of key U.S. economic data later in the week. If these numbers are weaker than expected, boosting demand for safe currencies like the US dollar and the yen, then the euro could fall to 130.00 against the yen, and to 1.3700 against the US dollar in the near-term. According to many traders, there is now a feeling in the market that the euro is indeed overbought, and therefore vulnerable to profit taking.

For the euro dollar, traders are reporting decent offers placed towards 1.3950 (USD1.3952 61.8% USD1.4002/1.3872), with the rate currently trading around the 1.3916 region. Stops noted through USD1.3955, which if triggered could open a move toward USD1.3970/75 ahead of a stronger area above 1.4000. Support is seen at 1.3910/00, and a break below could open a deeper move back toward overnight Asian lows at USD1.3883 with bids noted from this level extending toward the NY base at 1.3872.

Published on Fri, Jun 19 2009, 08:32 GMT

Trading Currency − Morning Report

Thu, Jun 18 2009, 08:36 GMT
by Anna Coulling

Master The Markets

Currency Markets - Yesterday & Overnight

The euro continued to rise against the dollar and yen in Asia Thursday as the region's investors became more optimistic towards the European economy after recent data, and more risk tolerance as crude oil prices moved higher. One indicator which has provided a bullish tone toward the euro zone was this week's German ZEW data, which measures sentiment among European financial analysts. The headline figure came in at 44.8, much better than the consensus forecast of 37.0, although all such indicators have to be treated with a degree of caution ( like many other items of fundamental news!). The recent rise in crude oil prices is also lifting the euro, by whetting investors' risk appetite, and prompting more purchases of euro denominated risk assets. The euro has been considered a higher risk currency than its U.S. and Japanese counterparts recently, and as a result has benefited when the market's risk appetite has increased. Asian traders were also talking Thursday about the effect on the currency market of the planned JPY923 billion share offering by Sumitomo Mitsui Financial Group Inc., Japan's third largest bank.

The UK Pound dropped against the U.S. currency in the European session yesterday as stocks slipped. Despite a brief but sharp rise after the U.K. claimant count in May came in better than expected, sterling tumbled from USD1.6483 to an intra-day low of USD1.6220 against the dollar. However, the pound was able to stage a strong rebound in tandem with the euro in the New York session, partly due to the low U.S. inflation data and short covering.

The Australian dollar was weaker in the Asian session late Thursday as the currency ran into significant resistance at the 0.80 price level against the US dollar, on the back of a continued decline in global equities markets.

Currency Markets - Outlook Morning Trading Session

The euro and other major currencies are trading narrowly on Thursday in movements lacking any discernible patterns, and generally consolidating in a narrow trading range, with some currency traders now of the view that the euro may keep rising because it looks as though the European economy is stronger than they anticipated a few weeks ago. The euro vs dollar is currently trading around the 1.3950 level, with offers remaining in place from around 1.3985 through to 1.4000. A break above this level could open a move on toward 1.4015/20 ahead of 1.4040/50. Support is seen at1.3920, with minor interest towards the 1.3900 level, ahead of 1.3885/80 and 1.3860.

For UK sterling bids remain in place between 1.6345/35, a break below would suggest a deeper move toward USD1.6300 ahead of 1.6280/70. Offers are noted between 1.6415/25, a break above could open a move toward 1.6450.

With regard to the Japanese yen, we may see some non Japanese investors buy the Japanese currency to acquire the bank's new shares with payments for the public offering due by June 22.

European stocks are expected to open largely flat Thursday, as investors digest news surrounding the banking sector on both sides of the Atlantic.

Published on Thu, Jun 18 2009, 08:36 GMT

Trading Currency − A Summary Afternoon Report

Wed, Jun 17 2009, 18:44 GMT
by Anna Coulling

Master The Markets

Previous Currency Session Summary

The euro is modestly higher against the US Dollar after two days in which the market was pulled in opposite directions, boosted by some negative US. Meanwhile volatility across the financial markets is increasing again, as evidenced in the rise of the VIX index, as uncertainty returns at the close of the first half of 2009 as traders and investors become more realistic in their expectations of an end to central bank easing. US inflation data released earlier today downplays the risk of an interest rate hike by the Federal Reserve later this year.

In May, US annual inflation slid deeper into negative territory, as consumer prices posted their largest annual decline in almost 60 years thereby confirming that the spectre of deflation is far from over. In addition the US current account gap was bigger than expected and both these factors boosted the Euro.

Wednesday morning in New York, the euro was at USD1.3875 from USD1.3849 late Tuesday, while the dollar was at JPY96.19 from JPY96.57. The euro was at JPY133.49 from JPY133.78. The pound was at USD1.6275 from USD1.6430, while the dollar was at CHF1.0880 from CHF1.0877.

Currency Market Expectation

Latvia revised 2009 budget has opened the door for funding from both the IMF and European Union thereby delaying devaluation of their currency even though many analysts expect this to happen later this year which as explained by Ambrose Evans Pritchard will be a terrible shock to those Latvians with mortgages denominated in Euros and Swiss Francs. As he explains in his article "The Cruxifixion of Latvia" this delay is primarily for the EU to buy some time to prevent " 1) a chain of falling dominoes in Eastern Europe; 2) a default shock for West European banks with $1.6 trillion (£970bn) of exposure to the region; 3) leakage from Bulgaria across the EU line into Greece – euroland's Achilles heel."

EURUSD holds USD1.3890 area in current trade, a slight uptick from recent levels around USD1.3865 with traders reporting patchy flows. Trader suggesting some "range" types may be selling into the current rally.

USDJPY losses extend to JPY95.85 area now as earlier noted demand interest and stops are flushed around JPY96.00. Further stops eyed under JPY95.70 area, described by traders as "magnetic."

Published on Wed, Jun 17 2009, 18:44 GMT

Currency Markets − Morning Report

Wed, Jun 17 2009, 08:32 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading Update

The US dollar has come under pressure once again, as major emerging market nations urged more diversity in the global currency system, another sign that big investors are growing restless with the dollar's dominance in world currency markets, whilst the euro gained back some ground against the yen and dollar in Asia Wednesday as stronger than expected share markets prompted funds and other short term traders and speculators, to buy back the risk sensitive currency. Many of these traders had been selling the euro in the early morning session on the view that Japanese stocks would fall after the Dow Jones Industrial Average closed down 1.25% overnight for its biggest two day loss since March. That selling pressure pushed the euro down to 132.55 against the yen, just before 00.00 GMT, its lowest level against the yen in nearly three weeks, but ironically Japan's benchmark Nikkei 225 Stock Average shrugged off the slide in U.S. stocks, trading up 0.8% in the early afternoon session, and prompting currency traders to reverse their earlier bets against the euro.

The Euro rose against the greenback yesterday, as Medvedev suggested a need for a global reserve currency other than the U.S. currency ahead of the BRIC summit. In the European session, Germany posted much better than expected ZEW sentiment data which came in at 44.8 in June, surging from 31.1 in May. These figures are in stark contrast to the more reliable ( and dire) fundamental data that has been forthcoming from Germany in the last few weeks, and certainly out of line with the German Chambers of Commerce warning regarding a possible banking system in crisis!

The pound was up nearly a percent on the day, after data showing a smaller than expected fall in UK inflation fueled expectations that the Bank of England may not need to continue quantitative easing much longer. Additionally, sterling's trade weighted index hit a seven month high, with the UK currency rising to its strongest this year against the euro.

The Australian dollar was slightly stronger in late Asian trade Wednesday, supported by some late bids in the currency, which initially fell on the back of weaker global equities markets.

Currency Markets - Outlook Morning Trading London

The euro is trading up slightly against the dollar, yen and pound on Wednesday morning, as a willingness returns by traders to take on risk once again, if only tentatively. Asian traders have noted that for the euro vs dollar, the area between 1.3750/1.3650 holds decent demand interest, suggested to be from the same party, with offers seen placed toward 1.3900. A break above would open a move toward USD1.3920 with interest seen from here and dotted toward 1.3935, with support noted at 1.3840, and more between 1.3825/20, ahead of stronger interest between the 1.3805/00 price point.

Despite the euro's slight gains, many currency traders suggested that its outlook for the coming weeks has been clouded by growing concerns over the health of euro zone banks, highlighted by an announcement from the European Central Bank on Tuesday that the European banks will have to write down an additional USD283 billion by the end of 2010.

Moving to Australia, many market analysts suggested that currencies like the Australian dollar ( often referred to as commdollars) may start to struggle should we see any downturn in commodity prices, and this may continue into the northern hemisphere summer as China's stockpiling begins to slow. However this would only represent a short term stalling of the broad uptrend in commodities, with the summer weakness providing opportunities to establish medium to long term positions in these currencies.

Currency dealers and traders are likely to stay primarily focused on stock market moves for the rest of the week. If the Nikkei heads higher again tomorrow and Friday, people may continue to buy back the euro, with knock on benefits for the dollar against the yen.

Published on Wed, Jun 17 2009, 08:32 GMT

Currency Markets − Afternoon report

Tue, Jun 16 2009, 18:16 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading Session News

The dollar was lower Tuesday morning following a failure to push decisively higher after Monday's rally and renewed fears about an erosion of the currency's reserve status prompted a change in direction for the currency.The greater comfort about the dollar's reserve status that prevailed on Monday was undermined again Tuesday when a Kremlin economic aide stated that Russian President Dmitry Medvedev "will raise the reserve currency issue," resulting in a bounce for both the euro and the UK pound. The remarks have raised the prospect that the dollar's role will be discussed at Tuesday's meeting between Russia, China, India and Brazil. The euro pushed briefly to a session high at USD1.3934 after some U.S. data releases Tuesday morning, but the numbers failed to have any marked impact on currency markets. U.S. housing starts increased 17.2% to a seasonally adjusted 532,000 annual rate compared to the prior month, the Commerce Department said Tuesday, whilst Building Permits in May increased 4.0% to a 518,000 annual rate. Tuesday morning in New York, the dollar rose to 97.08 from 97.84 against the yen after having dipped to 96.08. The euro moved to 1.3909 from 1.3796 late in New York on Monday against the US dollar. The euro is at 134.97, having dipped to 132.75 in earlier trading, while the UK pound hovered at 1.6463 up from 1.6315.

Currency Markets - Trading Outlook

Many currency and market analysts have reiterated their view that sterling remains undervalued suggesting that the currency's rally still has further to run, but this is contradicted to some extent by the daily chart which would seem to indicate that a double top has been formed in recent days. However this is counterbalanced by the view that both the 9 day and 14 day moving averages seem to be providing support at present. For sterling, support is seen placed ahead of 1.6450, after rate pulled back from extended recovery highs of 1.6506 earlier in the day. A move below 1.6450 may see a deeper move toward 1.6410/00, with stops below 1.6390. The euro vs dollar is slipping a bit now, as risk appetites build after the morning US data. Stops flushed above 1.3925 but those above 1.3935 remain intact, with offers placed at 1.3965/75.

The US dollar vs yen popped to 97.27 in the wake of the US data but has fallen back to the 96.38 area as risk appetite trades see little follow in the market. The euro pounds pair continues to move deeper, and is expected to meet resistance from offers between 0.8455/60. Above here and rate can push on toward 0.8480/90 ahead of 0.8500. Bids seen placed at 0.8435/30, more between 0.8410/00.

Published on Tue, Jun 16 2009, 18:16 GMT

Currency Trading − Morning Report

Tue, Jun 16 2009, 11:40 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading Yesterday & Overnight

The US dollar rose against a basket of currencies except the Japanese yen, which hit a multi week high against the dollar and the euro in Asia Tuesday as declines in Asian stocks boosted demand for the safe haven Japanese currency. The European currency declined 1.80 yen to 133.20 from New York late Monday, marking its lowest level since May 28. The dollar also dropped more than a yen to finish the trading session at 96.52, its lowest level since June 5.

The Euro fell against the dollar after Kudrin confirmed the dollar's role as the world's main reserve, whilst the report from U.K. Daily Telegraph on a deepening credit crunch in Germany also weighed on the euro in the Asian session. In addition, the euro zone posted worse than expected employment data. The single currency declined to as low as 1.3755 against the US dollar in New York during the afternoon session, before stabilizing in later trading.

The UK Pound held up better than most, but succumbed to USD strength, whilst the euro vs pound broke through 0.8500 during the day. A CBI report suggest that the UK economy may not recover until 2010 and that expansion of the quantitative easing program will almost certainly be required.

The Australian dollar fell in Asia trading Tuesday and should weaken further, as safe haven asset buying gathers momentum, in turn prompting good support for interest rate futures.

Currency Markets - Outlook This Morning

If share markets continue to fall, causing risk appetite among investors to weaken further, the euro may fall toward 130.00 against the Japanese yen in the near term, and any effects of the euro's fall versus the yen, could also drag the dollar lower against the Japanese currency. The U.S. currency's break below its recent level in the 97.00-99.00 price range means that further selling pressure (on other major currencies versus the yen) could accelerate the dollar's fall against its Japanese counterpart, bringing it down to as low as 95.00 in the very near term. European stocks are expected to open largely flat Tuesday, as investors pause for thought after Monday's hefty losses amid general concern that the hopes for a global economic recovery may be overdone.

The euro dollar reported comments from Russian President Medvedev, that the world needs a new reserve currency (coming ahead of today's BRIC meeting) prompted leveraged names to buy back into the euro vs dollar, lifting the rate to 1.3840 in early Europe. The rate dropped back toward 1.3810 only to pick up fresh buy interest with the ate moving up to 1.3901 at the time of writing. As mentioned earlier, offers seen placed from above USD1.3952 through to USD1.3960.

Currency traders are now focused on a summit meeting being held in Russia on Tuesday between leaders of the so called BRIC nations, namely Brazil, Russia, India and China.

Published on Tue, Jun 16 2009, 11:40 GMT

Currency Trading − Afternoon Report

Mon, Jun 15 2009, 16:20 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

The US Dollar is broadly higher Monday following developments at the G8 meeting of finance ministers helped to reinforce the currency's status as global reserve currency. Although the statement that emerged from the meeting in Lecce, Italy did not specifically mention currency markets, as finance ministers focused on exit strategies from their various emergency spending packages and bank rescues amid signs the economic crisis may have hit bottom, the greenback was nevertheless given some positive support by Alexei Kudrin of Russia who backed the Dollar's status as reserve currency. At the same time, a retreat in global equity and commodity markets is helping underpin dollar gains as traders indulge in a bout of profit taking against earlier sharp gains by the Euro and other currencies.

Meanwhile for sterling, the CBI (Confederation of British Industry) sounded a cautiously positive note on the UK economy, paring back its expectations for job losses and raising its 2010 growth forecast. However, it seems to have done little to prevent Cable's fall, although it has significantly outperformed the euro.

Monday morning the euro is at USD1.3877, from USD1.3995 late in New York Friday. The dollar is at JPY98.13 from JPY98.39. The euro is lower at JPY136.18 from JPY137.75. The pound is down at USD1.6420 from USD1.6436. The dollar is at CHF1.0892 from CHF1.0807.

Currency Markets Expectations

Markets appear nervous ahead of tomorrow's meeting of the BRIC economies (Brazil, Russia, India and China) and pushing investors into dollars although EURUSD did rebound to USD1.3855 area after an earlier push lower found a base just below USD1.3830. A series of lows set last week just ahead of USD1.3800 area are providing technical support for Eurodollar. Volume flows are thin which when viewed with Rate of Change indicator suggest the Euro could test lower.

British Pound is back below USD1.6400 as rate gets pulled lower by further Eurodollar slippage and euro-sterling continues to meet support around stg0.8450. Cable currently meeting support ahead of USD1.6350 (76.4% USD1.6325/1.6433), a break below would allow for a deeper move toward USD1.6330/25 ahead of USD1.6300.

Published on Mon, Jun 15 2009, 16:20 GMT

Currency Markets − Morning report

Mon, Jun 15 2009, 08:42 GMT
by Anna Coulling

Master The Markets

Currency Markets - Friday & Asia Monday

A reported worsening in credit conditions for large German companies weighed on the euro against the US dollar and Japanese yen in Asian trading Monday, amid worries that shaky European data would increase risk aversion. A report in the German magazine Der Spiegel, followed by a U.K. Telegraph newspaper report released during Asian hours, said that a poll by the German Chambers of Industry and Commerce would show this week that financing problems are deepening in Europe's largest economy. It was a stark reminder that in spite of brighter signs in the global economy, there may be trouble ahead, and that the 'green shoots' may be more deeply buried that many have been hoping! The reports caused the euro to fall to 137.22 against the Japanese yen, down from 137.75 in New York Friday. Against the dollar, it was at 1.3946, down from 1.3995 last week.

On Friday the euro tumbled to as low as 1.3935 versus the dollar in the New York morning trading session, after the release of University of Michigan consumer sentiment survey which was somewhat mixed and a bit of a curate's egg - 'good in parts' . Although the index rose to 69 from 68.7 in May, it fell short of economists' forecasts of 69.5. However, the euro vs dollar was able to recover some of its losses ahead of the G8 meeting which took place over the weekend.

The UK pound also fell on profit taking. Comments from Bank of England (BOE) officials voicing concerns about how sustainable the UK recovery were also weighing on the British pound on Friday. This contrasts with yesterday's comment from BOE policy maker Andrew Sentence who suggested that the UK recession may be "bottoming out".

The Australian dollar fell in Asia Monday, hit by renewed strength in the U.S. dollar, while interest rate futures gained on the back of a rollover of expiring contracts.

Currency Markets - Outlook For London

The US dollar is gaining against the euro and pound on Monday as global stock markets fall in a renewal of the quest for shelter against risk. The euro vs dollar has broken below 1.3890 triggering stops and allowing the rate to extend, easing to 1.3885 into early European trading. The break below 1.3894 (76.4% of the rally from USD1.3806 to USD1.4178) will add to the current bearish tone with technical traders looking for a deeper move toward that recent low at USD1.3806. Interim support is noted at USD1.3855/50 ahead of USD1.3810/00.

Sterling proving more resilient versus the US dollar with demand into early European trading providing cable with buoyancy while the euro to dollar remains soft and allows euro sterling to squeeze down to 0.8505. Cable bids are seen placed from USD1.6320 to USD1.6310, more toward USD1.6290 with stops below. Resistance is seen placed at USD1.6380/85.

In Australia, analysts described the local session as uneventful, as traders await fresh direction from the European and U.S. markets ahead of the Reserve Bank of Australia's monthly policy meeting minutes Tuesday. Currency traders will be looking for the RBA to expand on whether a further rate cut remains an option for policy makers, especially given moves by one major retail bank to hike its mortgage rates citing higher funding costs.

European stocks are expected to open marginally lower Monday, with commodity stocks set to weigh on the market as the week starts.

Published on Mon, Jun 15 2009, 08:42 GMT

Currency Markets − Morning Report

Fri, Jun 12 2009, 09:20 GMT
by Anna Coulling

Master The Markets

Previous Currency Session Summary

The US Dollar edged higher against both the Yen and Euro in Asia Friday as traders bought back the greenback to lock in profits ahead of the G8 meeting of finance ministers in Italy. With currency markets being driven by short term speculation the rallies in Asian stocks had little or no impact on demand for either the British Pound or Euro, which would normally benefit.

The US Dollar rose a third of a yen to JPY97.96 from New York late Thursday.

The Euro fell briefly to an intra-day low of USD1.3943 against the dollar after the release of US jobless claims and retail sales data, the single currency rallied from there to as high as USD1.4178 against the greenback before retreating as traders indulged in a bout of profit taking.

The British Pound extended its gains, hitting its highest level in 2009 versus the Euro, perhaps reflecting the belief that the UK economy may be over the worst of the recession. A survey showing rising UK inflation expectations and data pointing to economic growth in April and May bolstered the view that the UK economy may be recovering.

The Aussie Dollar was stronger but off its heady peak late Friday as a confidence led run in risk appetite was tempered by some profit taking. Economic data, both domestic and offshore, have been broadly supportive of the Australian dollar this week.

Market Expectation

The Euro and British Pound are little changed against the US Dollar Friday as traders look for a period of consolidation ahead of the weekend, and investors pause to assess the latest gains in various instruments in relation to economic prospects.

With G8 policymakers unlikely to focus much on market sensitive issues such as currencies or monetary policy, many investors are staying out of the market preferring to wait to hear what officials have to say about the global economy. Traders are also guarding against any unprompted comments finance ministers may make on government bonds, interest rates or currencies on the fringes of the meeting. It is unlikely that there will be any detailed discussion on currencies because central bankers will not be attending this G8 session.

European stocks are expected to open marginally lower Friday, as investors pause for breath, as the week draws to a close, and digest recent chatter about the "economic recovery".

The euro pound remains under pressure between stg0.8500/0.8495 and a break here would open a deeper move toward stg0.8480.

For the euro dollar support said to remain in place around USD1.4070 with stronger interest placed toward USD1.4050. Further support seen placed around USD1.4030 ahead of USD1.4005/1.3995. Resistance seen placed around USD1.4100, currently under pressure, a break and clear above to open a move toward USD1.4130/35. Through here and rate can extend move toward USD1.4150 ahead of stronger interest placed toward USD1.4180.

Published on Fri, Jun 12 2009, 09:20 GMT

Currency Markets − Afternoon Report

Thu, Jun 11 2009, 18:11 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

The US dollar was unable to hold on to its gains Thursday morning from marginally worse than expected US retail sales data, and the US currency is now lower against the euro. The data produced by the Commerce Department showed a 0.5% increase in retail sales, just missing economists' expectations of a 0.6% increase (although in some reports 0.7% had been given as the forecast), suggestive of a tougher road ahead Thursday for American equity markets which had briefly supported the dollar as investors reduced their interest in higher yielding, but riskier currencies. As a consequence the euro has shifted back above the USD1.40 level, after hitting an intra-day low of USD1.3943 immediately after the retail sales report.

The British Pound came very close to a symbolic high of USD1.6500 after a report showed rising inflation expectations. UK inflation expectations among the general public for the year ahead rose to 2.4% in May from 2.1% February, despite a drop in the actual inflation rate, data from the Bank of England released Thursday showed. However, cable only managed to reach USD1.6490, and has since retreated back toward USD1.6400.

Thursday morning in New York, the euro was at USD1.4016 from USD1.3987 late Wednesday. The dollar was at JPY98.19 from JPY98.28. The euro was at JPY137.58 from JPY137.47, and the British Pound was at USD1.6455 from USD1.6355. The dollar was at CHF1.0791 from CHF1.0814 late Wednesday.

Market Expectation

Investors are sceptical about buying the US Dollar primarily for two reasons: higher oil prices and Russia's plans to reduce its holdings of US Treasuries.

EURUSD flushed a few stops above USD1.4010, with gains extending to about USD1.4020 on the fills before euro settles back a bit to USD1.4007 or so. Offers remain around USD1.4030 area but talk from various directions mentions stops building at higher levels, basically from about USD1.4045.

EURGBP recovery off earlier lows around stg0.8502 extends to stg0.8520. Traders note that a UK clearer has been a noted buyer in euro-dollar in this pair's move back above USD1.4000, suggesting it could be linked to euro-sterling move with cable struggling to clear above resistance at USD1.6455.

USDJPY push higher post release of data allowed dollar-yen to extend beyond Wednesday's US session high at JPY98.45 for trade to JPY98.56 or so but pair stalled out there amid fresh supply and as the dollar turned against other pairs.

Published on Thu, Jun 11 2009, 18:11 GMT

Trading Currency − Morning Report

Thu, Jun 11 2009, 09:32 GMT
by Anna Coulling

Master The Markets

Currency Market Report

The US dollar declined against the yen and euro in Asia Thursday as players sold the currency to lock in profits after its overnight rise. Currency traders and investors also sold the dollar in reaction to news that both Russia and Brazil are planning to reduce their U.S. Treasury holdings in favor of new International Monetary Fund securities according to many market analysts. Japanese currency speculators and exporters sold the US dollar for the yen, while overseas funds sold it for the euro, in overnight trading. A rise in long-term U.S. interest rates lifted the dollar overnight, setting it up for a slight pullback during Asian hours. Dealers said there were no prominent trading cues, though Japanese exporters' selling the US dollar around the 98 price point were beginning to weigh heavily on the currency pair. Some traders have also suggested that the continued rise in oil prices is having a negative impact on the US dollar, with the price of Nymex crude futures rising above $72 per barrel for the first time since October last year.

The euro managed modest further gains during the early London trading session, reaching 1.4145, and appearing to shrug off an FT story about German banks, but spent the rest of the session declining to 1.3915 on the broad based rally in the dollar. Fitch warned of a rising risk of devaluation in Latvia, whilst Sweden's FSA confirmed that its banks could weather the Baltic credit risk.

The UK pound extended its gains against the dollar, rising nearly 1%, as Russia's comments weighed on the USD. Sterling's sharp gains against the dollar also helped it hit its highest level in 2009 versus the euro as it extended earlier gains, reflecting the belief that the economy is over the worst of the recession.

The Aussie dollar climbed strongly Thursday as better than expected employment data for May prompted investors to further lower expectations of a near-term interest rate cut.

Currency Market Outlook

Both the euro and the UK pound are gaining against the US dollar early Thursday, but dealers are cautioning that there may be a period of consolidation which is certainly suggested in the euro dollar daily chart, which appears to have settled into a narrow trading range. Offers are seen placed toward the overnight high at 1.4063, and a break above here could open a move toward 1.4090/00. Stops are noted through 1.4110, which if triggered could open a move toward1.4130 ahead of 1.4140/50. Support is seen at 1.4025/20, and stronger towards 1.4000 with stops placed on a break of 1.3990.

Wednesday's UK manufacturing data which was seen as supporting the view that the K economy is stabilizing at a quicker pace than the euro zone, provided underlying support for the pound. Bids remain in place toward 1.6380, with more towards 1.6350/40, with stops below. Resistance is seen at 1.6420/25 ahead of 1.6440/50 and Wednesday's high at 1.6475.

Market analysts are now waiting for the U.S. May retail and food sales, due at 1230 GMT, to gauge conditions in consumer demand. Economists surveyed have forecast a 0.5% rise. Some dealers said that weaker than expected figures could drag the US dollar lower.

European stocks are expected to open marginally higher Thursday, with oil and mining stocks again set to benefit from the surge in commodity prices, but doubts remain about the sustainability of this rally.

Published on Thu, Jun 11 2009, 09:32 GMT

Trading Currency − Morning report

Wed, Jun 10 2009, 09:17 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

The US dollar managed to regain some ground against the Japanese Yen in Asia Wednesday, helped by Japanese investors' bargain-hunting and an easing in risk aversion due to rising regional equity markets. However, currency traders expect the US dollar is likely to stay below JPY100.00 over the coming days, citing Japan's exporters preference for selling their dollars at this price point.

During the Asian session, the US dollar rose by about a third of a yen to JPY97.70 from the late New York session, recouping some of its one-yen loss overnight as Japanese investors bought on the cheap. Gains in Asian equity markets, led by oil and metal stocks following a surge in commodity prices, also hurt demand for the yen, which is considered one of the safest currencies.

In the Asian session the Euro briefly dipped to intra-day low of USD1.3853 possibly in response to news that the US government would like to see European banks undergo stress tests to ensure their survival in the event of a worsening of the global economy. However, on European officials expressing their scepticism the euro duly rebounded.

The British Pound recovered from its fall on Monday which had sent it to a two-week low against the US dollar as currency traders breathed a sigh of relief that the political storm engulfing UK Prime Minister Gordon Brown appeared to have calmed for now. In addition signs of a stabilization in the UK housing market fanned renewed optimism that the UK economy may be over the worst, thereby helping Cable to climb higher against both the dollar and the euro.

The Aussie dollar rose back above USD0.80 in late Asian trade Wednesday, supported by a run of strong domestic economic data indicators as well as an improvement in commodities prices.

Currency Market Expectations

Both the Euro and Cable are seen as having a bit more upside Wednesday although currency traders are expecting a round of profit-taking after recent gains against the US dollar, which retains underlying weakness. European stocks are expected to open marginally higher Wednesday, led higher by oil and mining stocks following a surge in commodity prices.

The euro vs pound has extended the base to stg0.8605 in early Europe as cable again outpaces euro dollar to the topside. Bids are seen placed to stg0.8590 with stops below, which if triggered could allow a retest of recent lows at stg0.8576. Bids noted from this level through to stg0.8570. Below here the rate can ease toward stg0.8550. Resistance noted at stg0.8635, more toward stg0.8650/55.

Market perception that US fiscal policy on interest rates may not happen until later in the year, November or even December, may pressure the US dollar in the interim. Offers for the euro vs dollar seen placed towards USD1.4120 with further interest seen dotted towards USD1.4135. Any break above here could see a move towards USD1.4170. Clues as to interest rate expectations may emerge following the employment data due out on Thursday.

Published on Wed, Jun 10 2009, 09:17 GMT

Currency Markets − Afternoon Session

Tue, Jun 9 2009, 15:52 GMT
by Anna Coulling

Master The Markets

The US dollar began trading with a softer tone early Tuesday, with the rally sparked by Friday's upside surprise in the May employment data, already showing signs of ending. After receiving support over the last two days from optimistic projections of a U.S. economic recovery and a faster turn toward higher U.S. interest rates, the dollar has since slipped back decisively from recent highs. As a result more risk sensitive currencies were able to stabilize late Monday after the reversal from earlier weakness for U.S. equities, and that improvement has carried over into Tuesday, despite a mixed performance for stock markets in both Asia and Europe. The euro has managed to move higher despite disappointing German April trade statistics and also industrial production figures for the same month, which surprised the markets.

Elsewhere in Europe, a temporary ebbing of alarm over the situation in Latvia and fears of imminent Latvian currency devaluation may have taken some pressure off regional markets and fed through to a better tone for the euro and regional currencies, according to market analysts, although the Swedish krona continues to experience volatility owing to the heavy exposure to Latvia by leading Swedish banks.

As outlined in previous market commentaries, the next few months will be characterised with investors flipping their attitude to risk, between the fear of deflation and the fear of inflation, in equal measure. This has manifested itself once again with the US dollar, where an improved risk environment and apparent market conviction that the dollar's 'post payroll bounce' has run its course, has seen the US dollar drop to new intraday lows against many currencies. As a result the euro vs dollar has extended gains above 1.4000 in late afternoon trading, and now sits at 1.4017, dow marginally from a new intraday high at 1.4025, and up from 1.3903 of late Monday.

The dollar vs yen continues to consolidate and trade sideways, falling back to 97.68, from a high of 98.42, whilst the UK Pound has hit a new intraday high at 1.6245 and now trades at 1.6269, up from 1.6057, whilst the dollar has similarly fallen to a new low against the Swiss franc of 1.0806 , down from 1.0913 late Monday.

With only a handful of U.S. economic releases due in the remainder of the week, attention is beginning to turn to this coming weekend's meeting of finance ministers from the Group of Eight nations in Italy, which should lead to a more stable and less volatile tone for major currencies, than has been seen in recent days.

Published on Tue, Jun 9 2009, 15:52 GMT

Currency Markets − Morning Report

Tue, Jun 9 2009, 09:22 GMT
by Anna Coulling

Master The Markets

Currency Market Report

The euro fell further against the dollar and the yen in Asia Tuesday, as regional stocks declined, prompting hedge funds to keep taking profit on risky currencies including the euro which fell 1.3853 overnight as a result. It also lost more than one yen, falling to 135.75 before recovering later in the trading session. U.S. and European hedge funds, some of which are set to close their books at the end of the month, kept offloading their holdings of currencies that many consider to be relatively risky, such as the euro, sterling and the Australian currency. The sellers took their cue from weakness in Asian shares, which often knocks those currencies lower by cooling demand for risk, which is likely to be a feature for the next few months, as investors flip between the fear of recession and deflation against the prospect of rampant inflation following low interest rates and an over supply of money in the financial system.

In the European morning session, the UK pound remained under pressure against the dollar as Prime Minster Gordon Brown confronted a fresh attempt to force him out, after support for his ruling Labour Party in European elections plunged to its lowest level in a century - our hapless and hopeless leader blunders from one crisis to another, and the only reason he was forced out is simply because the Labor party have no one better to run the country!! - says it all really!

The Australian dollar was weaker in late Asian trading Tuesday as the run up in shorter dated U.S. Treasury yields that have increased speculation about possible U.S. central bank rate hikes,prompted fears about the longevity of the so called 'green shoots of recovery'.

Currency Market Outlook

The euro faces the risk of falling to1.3500 in the near term, although it may lose a sense of direction once the current rounds of position adjustments run their course, according to many currency analysts. Some dealers suggested that the Standard &Poor's move Monday to downgrade the sovereign credit rating of Ireland, continued to weigh on the euro, while others brushed off the event as old news. The euro, Swiss franc and U.K. pound are tipped as buys against the dollar later on Tuesday, as the dollar's current run higher runs out of steam.

Markets reported to have been thin overnight, with the downside pressure squeezing out some of the weaker speculative longs. The euro vs dollar recovered ahead of the European open, with demand able to lift the currency rate back toward 1.3900. Failure to break above this level currently sees the pair trading back around 1.3875. Bids are seen placed toward 1.3850, more around 1.3840 with stops below, which if triggered could bring Monday's lows at 1.3806 back into focus. Bids are noted between 1.3810/00, more between 1.3795/90 with stops below. Resistance is seen placed between 1.3895/05, with more toward 1.3920 ahead of overnight highs at 1.3938.

Euro pound traders note that Monday's extended pullback found support at 0.8646, the level corresponding to a 76.4% retracement of the rally from 0.8578 to 0.8866. Bids are also noted from this level to 0.8640 with stops below, which if triggered, could open a deeper move toward 0.8625/20 ahead of 0.8605/00. Resistance is noted at 0.8670/75.

Analysts say much of the political uncertainty in the U.K. has now been priced into the market, and the reasons that had previously sent the pound to 2009 highs still exist. Meanwhile, disturbing euro zone developments, such as currency and banking fears in Eastern Europe and theBaltics, are now bubbling under the surface, and could cause euro instability in due course.

Published on Tue, Jun 9 2009, 09:22 GMT

Currency Markets − Afternoon Report

Mon, Jun 8 2009, 16:21 GMT
by Anna Coulling

Master The Markets

Currency Markets - Morning Session

The euro, and risk sensitive currencies, were all lower early Monday, as overnight equity market declines and a downgrade to Ireland's credit rating diminished risk appetites and added to the US dollar rally initiated late last week. The US dollar started the week still benefiting from the positive momentum generated by better than expected U.S. May employment figures, along with a shift in market sentiment that has come as investors entertain notions of a more rapid return to tighter Federal Reserve monetary policy. Events overnight generally continued to play to the US dollar's favor, as the euro, pound sterling, and riskier currencies were weighed down by declines on most major Asian and European stock markets, as well as a downgrade to Ireland's credit rating by Standard & Poors . The ratings agency cut Ireland's sovereign rating to AA from AA+, with a negative outlook contingent on developments in Ireland's banking sector. This was further testament to the continuing pressures on many euro zone financial institutions, which in turn helped to take the euro below 1.3900 against the dollar for the first time this month, but the euro has since recovered off its intraday low of 1.3806.

Early Monday in New York, the euro vs dollar is currently trading at 1.3868, down from 1.3964 late Friday, and at 136.39 down from 138.04 against the Japanese yen. The US dollar is at 98.35 down from 98.80 against the Japanese yen, with the UK pound at 1.5932 against the US dollar, down from 1.5971 late Friday.

Currency Market Outlook

The euro vs dollar has regained some of the earlier losses in afternoon trading and currently stands around 1.3850 area after stalling at 1.3890 following an attempt to move higher amid muted flows. Traders say flows are relatively low due the market perception that we may have reached a turning point for the pair, with many now believing the euro is overbought against the US dollar.

The euro vs yen bounce from European lows extended to the 136.75 area, with technical analysts noting this level corresponds with the 38.2% retrace of today's sell off, a key point on the chart. The euro yen is now easing back under 136.50 as US stocks trade in the red. Light bids are seen in the 136.00/90, with channel support from the May lows then on the horizon at 135.86. Additional pockets of demand are then seen at135.60/30.

The UK Pound's failure to make a clear break above 1.5940 has seen the rate pull back toward 1.5900, as weaker speculative longs get squeezed out of the market. Bids are seen placed at 1.5900, a break below here could open a deeper move toward 1.5880 or lower.

Published on Mon, Jun 8 2009, 16:21 GMT

Currency Markets − Morning Report

Mon, Jun 8 2009, 08:19 GMT
by Anna Coulling

Master The Markets

Currency Markets Friday & Overnight

The US dollar fell slightly against the Japanese yen and euro in Monday's trading session in Tokyo, as Asian players sold the dollar to take some profits off the table, following its strong performance on Friday in New York on a better then expected headline figure for the Non Farm Payroll data. However, according to many Asian traders this sell off is unlikely to continue further as we move through the trading session and into London, as they expect European traders, heartened by Friday's positive surprise from the U.S. job market data, to reverse the currency's course and push it up later in their first full trading session since the report as released. To recap the results, the NFP data showed 345,000 jobs lost in May, well below the forecast at 525,000 which many economists had expected, and the smallest number since the onset of the global financial crisis last fall. As a result, the euro fell more than 1% against the US dollar to a new session low as investors sold the euro on concerns that it had appreciated too fast and was therefore overbought. The European Central Bank left interest rates on hold, and indicated that the euro zone would have negative growth this year, but may recover in 2010. Meanwhile, its labor market would deteriorate further in the coming months.

The UK pound traded narrowly against the dollar in the London morning session. Sterling then rebounded briefly and sharply to a high of 1.6245 against the dollar after the release of U.S. unemployment rate. Investors focused on the much smaller than expected U.S. job cuts as a slower deterioration of the labor market, as this surprise number supported market views that dollar denominated assets will gain while the U.S. economy is recovering. As a result cable later tumbled to an intra day low of 1.5940 against the US dollar in the afternoon sesion in New York on Friday.

The Canadian dollar gains evaporated from a near eight month high after the economy lost a net 41,800 jobs in May after an increase of 35,900 in April. The Australian Dollar traded around the USD0.8000 level before dropping to USD0.7900 on the Chinalco news before recovering on a strong rally in Commodities and a buoyant stock market.

Currency Markets Morning Outlook

The euro is tipping slightly higher Monday as investors reassess the US dollars recent surge, following data showing signs of possible improvement in the U.S. job market. Many traders have not totally ruled out the possibility of more dollar falls during the rest of the global day, but indicated that as the market awaits further U.S. economic indicators later in the week, any sharp declines are unlikely. For the euro vs dollar, bids are seen placed at the 1.3940 level, stronger around 1.3925. A break below this latter level may open a deeper move toward USD1.3910/00 ahead of USD1.3850. Offers are now seen placed from around USD1.3990, with interest extending up to USD1.4005.

The dollar vs yen may rise more as players trim shorts amid heightened US dollar bullishness after better than expected U.S. jobs data Friday, according to many analysts, with the currency pair well supported above 98. Technically, the short term outlook remains bullish ahead of trend line resistance around 101.15-20, provided we can break out of the currency sideways consolidation. The most recent IMM report shows speculators still net short the dollar to yen pair. Currency analysts say that we may see further gains in the near term as players unwind positions.

European stocks are expected to open marginally lower Monday, as investors take time to digest last week's strong gains amid signs the U.S. economy, the world's largest, could be pulling out of its slump. All market traders and economists will be watching U.S. data closely this week for any confirming signals, an in particular the April trade balance Wednesday, followed by May retail and food sales Thursday, in order to confirm the view that the country's severe recession may be moderating.

Published on Mon, Jun 8 2009, 08:19 GMT

Currency Markets − Afternoon report

Fri, Jun 5 2009, 16:11 GMT
by Anna Coulling

Master The Markets

Currency Market News

For the first time in many months, the US dollar benefited from positive U.S. data Friday against both the euro and yen. U.S. job losses softened markedly last month in one of the strongest signals yet that the severe recession may be winding down with Non Farm Payrolls sliding to -345,000 in May, the U.S. Labor Department reported, well below the -525,000 decline economists had expected.Initially, the euro spiked against the dollar to a session high, as traders bought into riskier positions on the promising economic data. However, the euro then suffered from a sharp reversal as the currency markets considered the data in more detail and in particular that the strong figures could mean the U.S. fed funds rate may be back on its way up. Low rates and other monetary easing measures in the U.S. have undercut investor appetite for US dollars in the last few months in favor of the euro and commodity related currencies. The stronger than expected NFP data sent the front end of the Treasury market higher, suggesting investors are beginning to think about an increase in the fed funds rate after more than a year of aggressive monetary easing by U.S. policy makers.

The euro fell to a one week low of 1.4013, after rising as high as 1.4269 immediately after the report. Friday morning in New York, the euro was at 1.4043 from 1.4182 late Thursday, with the US dollar at 97.96 against the Japanese yen from 96.80 earlier. The euro was at 137.58, up from 137.24 also against the yen, and the U.K. pound stood at 1.6033 from 1.6186 earlier in the session. The dollar was at CHF1.0820 from CHF1.0700 Thursday.

Currency Markets Outlook

The euro vs yen base has been eroded and stops below duly triggered as the cross pair loses another 50 points down to current levels. Support is noted at 135.60/30, though orders still said to be few and far between as many currency traders take a back seat after recent volatility. The UK Pound has broken below 1.6000 at the second attempt, the first challenge meeting a regular bid at this level that soaked up several hits before the bounce took it back to the 1.6030 area. The rate fell as low as 1.5984, with earlier reports noting demand placed to USD1.5980. A break here may open a deeper move to USD1.5950 ahead of USD1.5920 and the near term technical target area around USD1.5885/80. Resistance remains in place at USD1.6030.

Looking further ahead for the euro, many traders are worrying that the ECB forecasts for the next 12 months are based on the assumption that the euro will be trading at USD1.33 in 2009 and USD1.34 in 2010. Meanwhile, ongoing fears over Latvia's economy continue to pressure local emerging market currencies and the Swedish krona.

Published on Fri, Jun 5 2009, 16:11 GMT

Currency Markets − Morning report

Fri, Jun 5 2009, 08:55 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading Session Review

The Japanese yen weakened slightly against the US dollar and euro in Asian trading Friday as a continued strong Japanese share market performance led to more risk tolerance, to the detriment of the yen,however, most trading remained subdued as the market wanted to see the results of U.S. non-farm payrolls data later in the day before building large positions. The U.K. pound, meanwhile, continued to languish on lingering political uncertainties in the U.K, and making the outlook even murkier was U.K. Work and Pensions Secretary James Purnell's announcement early in the Asian day, to quit the Cabinet and calling for UK Prime Minister Brown to stand down.

Much of the pressure on the dollar came from rising U.S. stock markets and higher global oil prices, which is now approaching $70 a barrel. These moves suggested risk appetite is improving, and as a consequence reducing demand for dollars as a safe haven, a key source of the US dollars strength throughout the financial crisis.

The euro fell against the dollar in volatile trading as Trichet did little to change expectations for interest rates in the euro zone. With no hint that another 25 basis-point cut in the second half is likely, Trichet admitted they'll have negative growth this year but says it will recover in 2010.

Sterling plunged Thursday on rumors U.K. Prime Minister Gordon Brown was planning to resign, and London's quick dismissal of the talk as "nonsense" wasn't enough to restore confidence in the U.K. currency with the UK pound falling from a London high of USd1.6435 to USD1.6090 around noon.

The Australian dollar was marginally firmer in late Asian trade Friday as investors refrained from taking large positions ahead of key U.S. employment data.

Currency Markets - Trading Outlook Today

In early trading this morning, the euro is holding slightly higher as the US dollar continues to come under pressure once again.For the euro vs dollar we have seen offers placed between USD1.4215/25, a break above would open a move toward USD1.4240/50 ahead of USD1.4275. Support is seen at USD1.4180 ahead of USD1.4165, with demand noted from this level, extending toward USD1.4150. Stops noted on a break below. A break below here may allow for a deeper move toward USD1.4130/20 ahead of USD1.4105/00 and USD1.4070. Larger stops noted under USD1.4050, which if triggered open a potential big drop to USD1.3730.

The UK pound is sliding once again in currency markets, as Japanese players sell due to lingering political risks in U.K. Many currency traders are squaring their pound positions to decrease their exposure against the political risks in the U.K. over the coming weekend, and as a result we could see the pounds to dollars pair possibly fall as low as 1.5900 in due course, and the pound vs yen may fall to 155.00. If the latter target is breached for the pound yen, then the next target will be 152.00 as 155.00 is an important technical line on the chart.

European stocks are expected to open higher Friday, following gains in Asian and U.S. markets and regain some lost ground after three successive losing sessions.The focus today for all markets will largely be on the U.S. nonfarm payrolls data, as investors watch for clues as to whether this key employment indicator suggests the global economy is indeed turning a corner.

Published on Fri, Jun 5 2009, 08:55 GMT

Currency Markets Afternoon Report

Thu, Jun 4 2009, 15:00 GMT
by Anna Coulling

Master The Markets

Currency Trading Update

The euro and U.K. pound fell to intraday lows against the US dollar after both the European Central Bank and Bank of England kept interest rates unchanged, as expected. While the decisions were widely anticipated, traders are taking every opportunity to liquidate some of the riskier positions accumulated over the past weeks on the conviction that the market has moved too far ahead of itself, and into an overbought state, particularly against the US dollar. The sell off also came amid market chatter that U.K. Prime Minister Gordon Brown might resign, which has since been denied by the government ( but we all live in hope that is happens soon!!!!)

Early Thursday in New York, the euro was at USD1.4108 down from USD1.4145 late Wednesday with the US dollar standing at 96.71 from 95.97, against the Japanese yen. The euro was at JPY136.47 from JPY135.73, and the U.K. pound was at USD1.6214 from USD1.6283. The US dollar was at CHF1.0724 from CHF1.0715 Wednesday. The euro had fallen as low as USD1.4070 early in the trading session, while the pound declined to USD1.6084.

Currency Trading market Outlook

A sudden and sharp fall in the British Pound's rate of exchange against other major currencies Thursday afternoon was the first indication that investors have become nervous about political developments here, with sterling continuing to meet support on the approach to USD1.6165, the level having contained pullbacks on three occasions now. Bids interest is seen placed to USD1.6150, but a break below would suggest a deeper move toward USD1.6130/20. Resistance is seen placed at USD1.6220.

The messy dollar yen is ebbing lower with the euro yen to trade around the 96.45 area now, with traders mindful of expiries for today that could also attract some buying of the currency.

The euro dollar slips back under USD1.4140, but could find support here, with markets swirling with talk that a major US name executed a basket trade to the value of USD5bln. Support is now seen placed at the traded low of USD1.4070, a break below this level could open the way to a deeper move toward USD1.4050 ahead of USD1.4010/00.

Published on Thu, Jun 4 2009, 15:00 GMT

Trading Currency − A Summary

Thu, Jun 4 2009, 08:19 GMT
by Anna Coulling

Master The Markets

Currency Markets - Overnight Trading

The euro rose slightly against the yen and dollar in Tokyo Thursday as currency traders hunted for bargains in the currency after its overnight fall, with many currency traders and dealers now suggesting that it was unlikely to rise much further in the coming days. Some traders sold the dollar for the euro in reaction to a Wall Street Journal story indicating that Malaysia and China are considering phasing out the use of the dollar as their trade settlement currency. The euro was also helped by further dollar negative sentiment, which was triggered by U.S. Federal Reserve Chairman Ben Bernanke's overnight warning on the ballooning U.S. budget deficit. The euro vs dollar rose to a marginal high of USD1.4339 in afternoon trading in Asia. The Euro zone service PMI data came out at 44.8 in May, which was slightly better than the reading of 44.7 in April.

The UK pound lost much of its recent gains against the USD, though it climbed to 6 month highs against the euro, after unexpectedly strong data on the services sector bolstered hopes for the economy. The purchasing managers' index for the UK services sector surprised with a jump into positive territory that was well above forecasts and showed growth in activity for the first time since April 2008.

The Japanese Yen couldn't hold on to the JPY96 level on the yen dollar currency pair as US dollar weakness intensified in the European session. Crosses remained buoyant but experienced waves of profit taking as the market becomes used to the new levels.

The Australian dollar was buffeted Thursday by news of a sharp deterioration in the country's trade balance in April, signaling the economy's continuing vulnerability in the face of the global economic downturn.

Currency Markets - Outlook For Trading This Morning

Many forex traders expect the euro to trade within a narrow range this morning, ahead of the rate announcement from the European Central Bank expected at 1145 GMT. It is widely expected that rates will remain on hold, and the markets will dissect the subsequent statement for any further word on quantitative easing measures from the ECB. Looking ahead, the euro is likely to be weighed down by any retreat in the recent rally in global equity and commodity markets, according to many dealers, while the view is gaining strength that the economy has possibly started to recover on a global scale, which is supportive of stock prices.

A major Asian euro dollar account has been cited as providing the early demand interest which has lifted the euro dollar back above USD1.42. The current rate is trading around USD1.4210, extending the overnight recovery highs of USD1.4192. Offers are now seen placed at the extended high of USD1.4210, more between USD1.4220/25 ahead of USD1.4250.

The UK pound recovered off the lows of yesterday, but an initial failure to push back above USD1.6250 led to a retest of lows before a secondary bounce proved stronger momentum. The rate pushed through USD1.6250, with momentum into early Europe able to take it on to USD1.6298. The pounds to dollars pair currently trades around USD1.6390. Offers seen placed to USD1.6400, more between USD1.6410/20 with stops above. Further offers then noted between USD1.6440/50. Support USD1.6255/50, stronger between USD1.6210/00. The focus for today for the UK pound is on today's Bank of England rate decision at 1100GMT, though no rate change expected.

Published on Thu, Jun 4 2009, 08:19 GMT

Currency Markets Morning Report

Wed, Jun 3 2009, 10:42 GMT
by Anna Coulling

Master The Markets

Currency Trading - Morning Session

The US dollar fell for a fourth straight session Tuesday as indications that the global recession may have reached a bottom, led central banks and others to sell U.S. currency they hold as reserves. As the Dow Jones Industrial Average rose, crude oil prices surged towards $70 a barrel as U.S. housing data Tuesday provided further encouragement, with investors betting against the U.S. currency and buying currencies that may be deemed riskier but offer higher yields. There is also a sense that a return of risk appetite and increased demand for goods and services could send U.S. inflation much higher, making dollars less of a safe haven than previously thought. The euro climbed as high as $1.4332 intraday against the US dollar, its highest since December 29th last year, with the U.K. pound reaching $1.6596, a peak last seen in October 2008.

Over the past few years, there have often been rumours and speculation that global central banks may reduce their dollar holdings, to the extent that the US currency could eventually lose its important status as the world's main reserve currency. Whilst the current decline is due to a combination of many factors, this one at least is not holding any credence at present, but it is one that is often muted when such declines occur. Whether it has any validity only time will tell, and most serious analysts and experts believe that this will never occur, but it is indicative of the severity of the fall in the US dollar, that once again this idea has risen to the surface once again! From a factual perspective, a report in late March showed that at the end of 2008, approximately 64% of countries' foreign exchange reserves were held in US dollars, virtually unchanged from the end of the third quarter= with the number two reserve currency being the euro, with 27% of the total. The rising risk appetite that's pushing the dollar lower has come largely on the back of a steady flow of U.S. and global economic data that indicates labor, manufacturing, housing and other sectors are either improving or stabilizing. The most recent report was released on Tuesday, when the National Association of Realtors said pending sales of existing U.S. homes in April rose 6.7%, the biggest monthly jump in eight years. This higher risk appetite also has the effect of causing less widely traded currencies to surge against the dollar. The Colombian peso for example hit its strongest level since September 22 on Tuesday and has appreciated over 27% in the past three months. The dollar traded at COP2,063 Tuesday, down from as high as COP2,613 in early March.

Currency Markets - Outlook For Trading Today

The US dollar once again declined in Asia Wednesday, hitting a seven month low against the British pound and an eight month low versus the Australian dollar, as gains in regional stocks helped lift investor demand for riskier currencies. Sterling touched $1.6658 during the session, the highest in seven months. The Australian dollar, partly helped by the country's surprisingly strong gross domestic product data, reached $0.8265 - a level unseen since September 29th last year, with the euro also gaining against the U.S. currency. In early Asian hours, higher Asian shares encouraged short term currency traders in the region to buy riskier, higher yielding currencies against the low yielding U.S. and Japanese currencies, according to many currency dealers. Japan's benchmark Nikkei 225 Stock Average index was up 0.5% at 9754.86 as of 0400 GMT.

Along with the sterling, the euro rose $1.4326 from the New York trading session late Tuesday to $1.4330, with many currency traders now seeing 1.4500 as the next logical target for the euro vs dollar currency pair in the short term, whilst awaiting the European Central Bank's planned policy meeting on Thursday. However any impact will probably be muted if the outcome of the meeting is in line with market expectations, with the markets anticipating that the ECB will keep its interest rate unchanged, but will release details of its plan to purchase around EUR60 billion in covered bonds.

Published on Wed, Jun 3 2009, 10:42 GMT

Currency Markets Afternoon Report

Tue, Jun 2 2009, 16:11 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading Session Roundup

The US dollar was generally lower Tuesday morning as major currency pairs reflected continuing risk appetite and tracked stock futures in early trading, in the absence of any critical U.S. economic data or other market moving developments, suggesting once again that the fundamental news is being discounted across the board by the currency markets in general.

After slipping against the dollar in European trading, the euro and other major currencies shifted higher as North American trading picked up, largely once again following the trading pattern in stock market futures. One large order to buy euros that hit the market in early North American trading also helped bolster the currency.

The UK pound reached a seven-month high at USD1.6449 but then surrendered much of its gains on fundamental news from the U.K, before surging higher once again. Tuesday morning, the pound was at USD1.6434 from USD1.6438 with the euro at USD1.4232 from USD1.4150. It's at JPY136.08 from JPY136.67. The dollar is at JPY95.62 from JPY96.65 late Monday in New York, and at CHF1.0626 from CHF1.0716.

Currency Markets - Outlook Evening Session

The UK pound is finding demand around USD1.6420 on the corrective pullback off USD1.6502, with earlier reports placing demand between USD1.6515/20. The pound vs dollar is currently trading around USD1.6552. Further demand noted at USD1.6390 with stops placed on a break below. It seems that there is no stopping the UK pound a the moment as we push towards 1.6780 and beyond as our next target. The only caveat is that should Friday's NFP numbers come in worse than expected then this could result in a fall in equities with a consequent rise in the US dollar - if this does occur then we could see a pullback in the dollars to pounds pair.

The dollar yen skidded to fresh lows for the day around JPY95.30 area as the dollar melted down elsewhere and as the pair slid under support at JPY95.55/70 ( Tenkan line, 100-day moving average), the pair are starting to "feel heavy" below JPY96.00, according to many currency traders. Since then the dollar has rebounded to JPY95.65 area as the US currency regains some poise.

Euro vs dollar traders report mixed flows in the pair in the last hour or so, hedge funds, speculative names, central banks and macro names, have all been cited as among the buyers as the euro romped higher to USD1.4280 area, only to reverse course to USD1.4220, which is the current trading range. Stops were flushed out under USD1.4250, underscoring the fast money nature of many of the participants. Real money is said to be largely staying on the sidelines and watching the speculators this afternoon.

Published on Tue, Jun 2 2009, 16:11 GMT

Trading Currency − Morning Report

Tue, Jun 2 2009, 07:52 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading Session Review

The Japanese yen regained some ground against the dollar in Tokyo Tuesday as Japanese exporters and foreign hedge funds bought the currency on its lows. These exporters were taking advantage of the cheaper yen, after it fell overnight, to boost their yen proceeds from products sold in dollars overseas. The hedge funds and other short term players were buying the Japanese currency against the US dollar to lock in profits, according to many traders.

Meanwhile, the US dollar's broad weakness persisted, as traders remained bearish on the funding currency amid a rally in global equity and commodity markets. The euro extended its recent rise to USD1.4246 against the dollar in European morning after the release of better than expected German manufacturing PMI data (39.6 versus forecast of 39.1) and the euro zone manufacturing PMI which also beat economists' expectations (40.7 versus 40.5). However, the euro retreated in New York Yesterday on the release of the U.S. core PCE data, the major measure of U.S economic growth.

The UK Pound surged 200 pips and as risk appetite has steadily increased, further gains cannot be ruled out. Nationwide house prices dropped -0.4% vs. -1.2% forecast. The euro vs pound kept to a tight range above 0.8700 with further drops seen as likely.

The Australian dollar was higher in late Asian trade Tuesday as indicators continued to point to a recovery in the global economy. Stronger commodities prices and economic indicators from both Australia and offshore have supported the Australian dollar above USD0.80, according to many currency traders.

Currency Market Outlook - London Session

Such doubts about continued dollar weakness have turned many players' attention to the U.S. non farm payroll report for May due Friday, and if it shows a worse than expected job market deterioration, that may benefit the dollar against currencies like the euro. However such a scenario could favor the Japanese yen even more, as it is considered an even safer asset. If a particularly bad figure were to "drag down" long-term interest rates and hit stocks, that could lead to some Japanese yen buying.

The euro faces a test of faith as the market waits to see if support around USD1.4035 will hold up. If so, investors could step in with long euro dollar positions once again. Fresh sell interest into early Europe has taken the euro vs dollar through overnight lows, touching USD1.4127 and currently trading around USD1.4137. Bids seen placed between USD1.4125/20, stronger around USD1.4100 with stops noted between USD1.4095/90. Through here and further demand is seen at USD1.4070 ahead of USD1.4050 with USD1.4030 suggested as a critical level in order to keep the current underlying positive tone in place. Resistance is seen at USD1.4170/75, more toward USD1.4200.

Published on Tue, Jun 2 2009, 07:52 GMT

Currency Markets Afternoon Report

Mon, Jun 1 2009, 17:11 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

The US continues to retreat as investors regain their appetite for risk, bolstered by solid economic data in both Asia and Europe. Cable was particularly favoured against the US dollar, pushing it to its highest level since late October, although the Aussie and Kiwi also continued their assault on the US dollar as they rallied to highs not seen since last autumn. The British Pound was also boosted by news that the UK's manufacturing PMI rose to 45.4 in May from 42.9 in April. The Aussie Dollar reached a high of USD81.36, its highest level since 29th September. The Kiwi also touched a high of USD65.00, its highest point since 3rd October.

Monday morning, the dollar was at JPY95.31 from JPY95.27 late on Friday in New York. The euro rose to USD1.4206 from USD1.4141 and was at JPY135.32 from JPY134.77. The dollar was at CHF1.0666 from CHF1.0680 while the British Pound rose to USD1.6385 from USD1.6169, touching a daily high at USD1.6430.

Currency Market Expectation

As stability returns to equity markets and America's massive fiscal imbalance show no sign of abating investors seem to determine to embrace risk and diversify away from the US Dollar, hence the inflows into equities, commodities and currencies.

During the worst of the financial crisis the British Pound and the UK were harshly treated by traders and investors to the extent that GBP/USD fell by around 25%. However, the recent turnaround has been been truly impressive with the pair having posted the biggest monthly gain in over 10 years.

USDJPY surge extends to beyond JPY96.00 area with short getting squeezed as risk trades emerge. Dollar last at JPY96.30. EURJPY extending two month highs after taking out offers in the JPY135.70 area, amidst a background of rallying US stocks and improving risk sentiment. Euro-yen now makes a show above JPY136.00 where traders are noting pockets of small supply scattered up to the JPY136.50 area.

Published on Mon, Jun 1 2009, 17:11 GMT

Currency Markets Morning Report

Mon, Jun 1 2009, 08:34 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

The US dollar fell against a broad range of currencies, including the yen and euro, in Asia Monday as recent steady equity markets and stabilizing financial markets boosted investors' risk appetite prompting them to dump dollar assets. At one point during Asian trade, the US dollar lost more than half a yen and hit its lowest level against the euro since Dec. 30. This weak dollar trend is likely to continue for the present. One of the reasons for the market becoming so bearish on the dollar is because many US investors are buying overseas assets in Japan and Europe which involves heavy dollar sales.

The Euro hit a 2009 high of USD1.4168 against the US Dollar as some equity markets posted their highest 2009 levels, thus reducing the safe haven demand for the dollar.

Cable too posted its biggest monthly gain against the dollar in 24 years as it touched the highest level in 2009. Cable's strong rise from 1.5918 started after the release of better than expected housing figures in the housing index which showed a jump from -0.3% in April to 1.2% in May.

The Aussie dollar was trading close to fresh eight month highs in Asia late Monday, having broken through the psychologically crucial 80 barrier on the back of continued US dollar weakness and end-of-month hedging flows. The Aussie dollar has continued to defy market speculation it may be running too high and too fast, having cut through the levels it so easily broke down through during the post-Lehman Brothers collapse meltdown of September.

Currency Market Expectation

Dollar weakness generated by on market fears of rampant inflation further down the line amid worries about the US's fiscal health is continuing Monday as currency traders and investors look for more promising assets such as the Euro, British Pound, Yen, as well as gold and silver.

The release of better than expected Chinese PMI data was the catalyst for another round of dollar sales as risk sentiment improved, with eurodollar pressing back to USD1.4162, but later easing back over the course of the Asian afternoon to USD1.4120. In early European trading sees the pair easing back towards the overnight lows. Bids seen placed into USD1.4100 and USD1.4075, with offers at USD1.4170, while technical analysts see resistance at USD1.4187 (76.4% USD1.4721-USD1.2459).

A pullback over the Asian afternoon took the GBPUSD back under USD1.6200 and early European trade now seeing the pair holding around USD1.6210. Euro-sterling meanwhile traded within stg0.8708/0.8733 as euro lagged the early sterling move. Cable offers noted into USD1.6250, where currency traders noted reports of barrier interest last week, with stops lurking above. Bids come in at USD1.6180/70, more noted into USD1.6125.

European equities are expected to open higher Monday, benefiting from a late surge on Wall Street Friday, as investors express confidence about the economic outlook and an expected turnaround at troubled car giant General Motors.

Published on Mon, Jun 1 2009, 08:34 GMT

Trading Currency − Morning Report

Fri, May 29 2009, 08:19 GMT
by Anna Coulling

Master The Markets

Currency Trading - Morning Report

The Japanese yen rose against the US dollar and the euro in Asia trading on Friday, helped by strong factory output data released by Japan, but many currency traders were uncertain as to whether the Japanese currency could climb further in the next few days. Data from Japan's trade ministry showed that industrial production rose 5.2% in April, the biggest gain since March 1953, and as a result led Asian hedge funds and other short term investors to buy the Japanese yen. The data added to hopes that Japan's export reliant economy has left behind the worst of its recession, although other data issued in the day indicated that its domestic demand is deteriorating, so a slightly confusing picture for fundamental news. The US dollar fell briefly to 96.25 against the yen, down more than two thirds of a yen from late New York Thursday, before recovering to around 96.50.

In Europe, the Euro fell to USD 1.3793 against the dollar in Asian session before rebounding from there, partly due to cross buying versus the yen and the release of better than expected German employment data (unemployment rate at 8.2% vs a forecast of 8.4% ), whilst the unemployment change also rose by a much lower than expected number at 1,000 in May against a forecast of an 67,000 increase.

The UK pound traded briefly above the USD1.6000 level but ran into a wall of offers and pulled back later in the trading session, as this price level now proves to be a major stumbling block to any move higher. CBI distributive trades fell to -17 against a forecast 0f -10 . The pound yen was incredibly well supported, and traded at fresh year highs of 155 Yen. Finally the aussie dollar tried to make a new weekly high after Sydney's close, but only managed to reach 0.7870.

Currency Trading - London Session Outlook

The outlook for the yen looks unclear as many of the currency markets still lack any clear sense of direction, according to many analysts and currency speculators. Currency traders' focus is changing around so often, so quickly, from stock markets to U.S. yields to economic data, that it's too risky to make long-term directional bets,and many traders are now simply focusing on intra day trading using shorter time frame charts.

The currency markets are now waiting for revised U.S. gross domestic product data for the first quarter due later in the global day to gauge the state of the world's largest economy. The euro is higher against the dollar, closing in on USD1.40, and both are lower against the yen, as the market renews its focus on dollar weakness, primarily from a technical perspective, and view supported by the US dollar index, which is looking increasingly bearish.

The euro vs dollar is currently holding back around USD1.4000. The focus during the day will turn to end month MSCI fixing flows with trader's suggesting medium demand for dollars versus the euro. Despite this some technical traders already see potential for a further rally in the euro dollar possibly as high as USD1.4200 (there are many barriers positioned here). Support is seen placed at USD1.3960, with interest trailing all the way down to USD1.3945. Stronger interest is placed at USD1.3925/20 with offers placed at USD1.4015/25, USD1.4045/50. Some currency traders were citing news that Korea's National Pension Service planned to lower its exposure to U.S. bonds. This may have prompted some selling of the U.S. dollar, though the Korean government didn't say how much the fund might reduce its U.S. bond exposure, or whether this would mean buying fewer bonds or divesting existing holdings.

The UK pound has received a boost this morning posting highs at USD1.6021 on release of stronger than expected nationwide house price data, the rate extending highs to USD1.6025 and retaining a firm tone. Offers seen placed to USD1.6030, with more toward USD1.6050. This is despite the technical weakness now in evidence on the daily candle chart for the dollars to pounds pair.

Published on Fri, May 29 2009, 08:19 GMT

Trading Currency − Afternoon Report

Thu, May 28 2009, 14:49 GMT
by Anna Coulling

Master The Markets

Currency Markets - Morning Trading Session

The US dollar was sharply higher against the Japanese yen Thursday morning on investment flows out of Japan, but currency markets overall are lacking in direction as traders wait for another U.S. Treasury auction later in the session. Japanese buying of foreign bonds appears to be the key driver of the dollar's strength against the Japanese currency, with month end positioning and stop loss selling also cited as reasons for the yen's retreat. News that the S&P had actually lifted the outlook for New Zealand debt to stable from negative, after the country released the budget plans, also buoyed the currency. The New Zealand dollar is around 62.44 cents U.S. from 61.59 late Wednesday.

News that U.S. durable goods unexpectedly surged by 1.9% in April, much stronger than the flat performance expected by economists, and that initial U.S. jobless claims dropped by 13,000 to a seasonally adjusted 623,000 in the week ended May 23, had relatively little impact on currency markets. The euro gained some ground against the dollar after the news, but afterward surrendered it.

Thursday morning, the euro was at USD1.3869 from USD1.3888 late Wednesday, while the dollar was at JPY97.14 from JPY95.21. The euro was at JPY134.75 from JPY132.24. The pound was at USD1.5922 from USD1.6005, while the dollar was at CHF1.0906 from CHF1.0883.

Currency Markets - Afternoon/Evening Trading Session

Currency markets are somewhat directionless early Thursday ahead of the auction of USD26 billion in new seven year U.S. Treasury notes later in the session. The UK Pound snaps back above USD1.5900, with rate recovering to USD1.5948 after being pressured to pullback lows of USD1.5875 and looking at the time as if it was targeting stops below USD1.5850. Above USD1.5950 may allow for a retest on earlier highs at USD1.5978, with offers noted to USD1.5980. Break here targets USD1.6000 once again, but with a shooting star candle on the daily chart, this is increasingly looking unlikely. Equity markets are bouncing around with the dollar yen rally failing to make a clear break above its key resistance level at JPY97.20/25 (200 day m/a) seen prompting the snap.

The euro pound remains in consolidation mode, following yesterday's extended easing to 0.86535, with the rate currently held within an outside range of 0.8685/80-0.8720/25. Rate currently favors' the upper end of the range though holding off a retest of earlier highs around stg0.8721. Stops noted on a break of stg0.8725/30. The euro yen takes out the May highs on the break above JPY134.80 as the yen crosses all trade with a strong bid tone. Some light interest reported into JPY135.00 now, more around JPY135.50/55, though little of significance ahead of the April spikes high at JPY137.39.

Published on Thu, May 28 2009, 14:49 GMT

Trading Currency − Morning Report

Thu, May 28 2009, 08:10 GMT
by Anna Coulling

Master The Markets

Currency Market - Overnight

The US dollar rose against the yen in Asia Thursday following speculation that Japanese institutional investors will buy significant quantities of foreign assets, which in turn prompted overseas investors to sell the yen. Sentiment turned against the Japanese yen versus the dollar earlier in the week, when currency traders and investors failed to push the US dollar back below the technically important 93.50 price level. In addition, Japanese trust funds' scheduled purchase of overseas assets this week prompted non Japanese investors to buy back the dollar, according to many traders, however a sustained hold above the $97 level seems increasingly unlikely as Japanese exporters have already placed dollar selling orders around this level, and this coupled with lingering doubts about the U.S. economy are keeping US dollar bullish sentiment in check.

Having said that, the US dollar received a boost after Moody's confirmed on Wednesday that its U.S. triple A rating is safe, citing the country's diverse and resilient economy, strong government institutions and high per capita income as key factors in the decision.

In Europe, the Euro struggled at the USD1.4000 level before falling heavily in the final hours of the day on the back of increasing US yields. The pair fell to USD1.3850 but the expected support failed to appear and the slide continued into Thursday. Also hurting the sentiment was a FDIC report with a negative outlook on US loan quality. German CPI fell to 0.0% on a y/y basis. The UK pound traded at its highest level since last November supported by improving housing data and optimism that the worst of the financial crisis is over, with business economists expecting the US recession to end in the third quarter, even as unemployment continues to rise.

The Australian dollar was weaker in Asian trading late Thursday as surging Treasury yields triggered fears about the impact of rising U.S. government debt on the global economy.

Currency Market - This Morning

In the Japanese market, currency traders expect to see dollar buying which may lift the dollar yen currency pair to the 97.00 price point later in the trading session, with many traders now focusing on equity markets and developments regarding troubled car giant General Motors. The euro and dollar are rallying against the yen, but the dollar in turn is higher against both the euro and U.K. pound. Currency dealers feel that investors are once again turning to the dollar again as protection against risk. The euro could see accelerated selling this morning with a fall under USD1.3800, while the pound has stiff resistance around USD1.60 for now, which seems to be proving a strong barrier to any move higher.

For the euro dollar offers remain in place around USD1.3840, stronger between USD1.3850/55 with stops above USD1.3860. Support remains toward USD1.3790, with interim interest seen building again around USD1.3800. Stops noted through USD1.3785, which if triggered opens a deeper move toward USD1.3765. For the UK Pound offers remain in place around USD1.5950/55, a break above to open a move back toward USD1.5975/80. Support seen placed from around USD1.5910, with interest extending to the overnight base at USD1.5899. Further demand seen placed at USD1.5885/80 with stops below.

Published on Thu, May 28 2009, 08:10 GMT

Trading Currency − Afternoon Report

Wed, May 27 2009, 18:24 GMT
by Anna Coulling

Master The Markets

Currency Markets - Review Of Trading Session

The US dollar is generally stronger against its major rivals early Wednesday in the midst of an unsettled global risk environment, though its gains are widely seen as fragile and prone to potential reversal. fter falling overnight to a succession of new multi-month lows against currencies such as the UK pound and the Canadian dollar, the US dollar enters North American trading on a firmer footing owing to moderately higher levels of global risk aversion. Some of the more cautious market environment is attributable to North Korean sabre rattling over international responses to its recent series of nuclear and missile tests. North Korea earlier on Wednesday threatened military action against South Korea if a U.S. led operation to contain weapons of mass destruction results in the interception of any North Korean vessels. News of escalating tensions on the Korean peninsula has tended to reaffirm the dollar's safe haven status and has also weighed on the Japanese yen. Besides geopolitical factors however, other typical indicators of global risk sentiment are in better shape Wednesday, as most major Asian and European equity markets have posted gains. In the London session, the euro was at USD1.3946 from USD1.3983 late Tuesday, while the dollar was at JPY95.09 from JPY94.9. The euro was at JPY132.62 from JPY132.81. The pound was at USD1.6022 from USD1.5928, while the dollar was at CHF1.0853 from CHF1.0846.

Currency Markets - Market Outlook

The afternoon and evening session follows the existing home sales figures, as well as the Treasury's latest 5-year bond auction later in the day, with the US dollar having lost some ground in early trading against all major currencies as traders chase around a rumor of dollar negative comments from a US official, although traders say they are unable to track down the remarks. The UK pound has broken back above USD 1.6000, moving through suggested resistance levels to currently trade around USd1.6020/25. Momentum stalls in this area but underlying tone remains firm, traders say. The next band of resistance seen placed between USD1.6040/50 (earlier rally high and tech target respectively). Suggestions continue that USD1.6050 holds barrier interest, though no confirmation has been seen from normal good sources. The dollar yen dropped below JPY95.00 toUS trade under JPY94.70 as the US dollar took a hit on unsubstantiated talk of official, dollar negative, remarks.

Published on Wed, May 27 2009, 18:24 GMT

Trading Currency − Morning Report

Wed, May 27 2009, 08:24 GMT
by Anna Coulling

Master The Markets

Trading Currency - Markets Overnight

The Japanese yen touched a one week low against the dollar in Asian currency markets on Wednesday, as rising regional stocks and signs of healthy demand for U.S. government debt eased worries over the U.S. and global economies, boosting investors' risk appetites. Japan's currency, which is widely considered the safest currency to buy at times of crisis, often comes under selling pressure when the outlook for global growth improves. In addition to optimism over the U.S. and world economies, expectations that Japanese mutual funds are about to resume investment in overseas assets also hurt the yen,according to many currency dealers and market traders, with Asian investors leading the selling. The US dollar rose to a one week high of 95.51 against the Japanese yen, compared with 94.97 in New York late Tuesday, and dealers expect further appreciation ahead. The euro climbed one yen to trade around133.53.

The euro was sold until noon in London on weak current account and industrial orders data, falling from a high of 1.4000 to 1.3860, but rebounded in afternoon trading after much better than expected U.S. consumer index numbers, with the data also boosting U.S. equities as investors became more optimistic that the worst of the global recession is now over. In other currency markets, the UK Pound rallied sharply following the European lows, although settled well below the key USD1.60 level. The banking sector rebound is helping the UK Pound to recover faster than other currencies with London a major financial centre. Finally, the Aussie dollar was stronger late Wednesday as rebounding risk appetite on the back of Wall Street gains emerged as a strong driver of higher yielding currencies.

Trading Currency - Forex Market Outlook

Both the US dollar and the euro are higher against the yen, but doubts remain that the dollar's rebound will last long. The euro is holding even against the dollar. According to many currency traders the U.S. dollar was helped by a report in the Wall Street Journal that General Motors Corp. and the United Auto Workers have agreed to a new restructuring plan. The new version would give the union a significantly smaller stake in the company than previously envisaged, and leave the U.S. government owning as much as 70%.

The U.K. pound is carrying on its technical rebound against the dollar, and could reach USD1.60, but at this level we may see some selling emerge. The pound is also higher against the euro yet also looks vulnerable to profit taking. The euro dollar initially followed euro yen higher at the start of the currency trading session, but failed to reach last night's USD1.4023 NY high (USD1.4001 high so far) after running into rumored sell orders at USD1.4020, while larger interest is now seen at USD1.4040 region. The pair's subsequent pullback could see it slide through USD1.3990, with mild stops seen on the break below USD1.3980, for a USD1.3948 low, before a bounce. A moderate level of bids is now noted at USD1.3930, according to currency traders and dealers. The dollar yen is currently trading at JPY95.35, with offers just ahead of the early high at JPY95.50, capping gains for now, but a break of these could then see the pair push on towards JPY95.80, where there are more buy stops said to be sitting.

European stocks are expected to open higher Wednesday, benefitting from the healthy tone on Wall Street Tuesday, as investors take comfort from some positive economic data.

Published on Wed, May 27 2009, 08:24 GMT

Trading Currency − A Summary

Tue, May 26 2009, 08:22 GMT
by Anna Coulling

Master The Markets

Currency Markets Review

The euro fell against the yen and dollar in Asia Tuesday after a report in the U.K.'s Daily Telegraph about Germany's toxic debt problems added to worries over the gloomy economic outlook in Europe, causing Japanese investors to sell the European currency. The Daily Telegraph reported that Germany's financial regulator, BaFin, has warned that the toxic debts of the country's banks will blow up "like a grenade" unless they take advantage of the government's bad bank plans to prepare for the next phase of the crisis, and I have added the link above to the article. The report grabbed the attention of Japanese investors who had until then been focused on the U.S. economy, according to currency dealers pushing the euro down by four-fifths of a yen to JPY132.05 from its levels in New York late Monday. Tuesday's Asia session got off to a slow start, with many pairs continuing to trade in a tight consolidation range following the US holiday. However risk aversion quickly appeared, as traders took the opportunity to take profits on recent gains. The euro dollar suffered as a result, with the pair reversing sharply lower back through the USD1.40 handle to trade below USD1.3950.

The Pound was little changed with the market recovering from Asian losses during a quiet day of trade. Reports that China FX managers were 'negative' on the UK Pound did little to dent the bullish tone the pair has developed recently. The Australian dollar was weaker in Asian trading late Tuesday as the U.S. currency sell off of the past week eased to a halt amid thin volumes in many foreign exchange markets.

Currency Markets Outlook

The euro is lower this morning with some U.S. dollar bids before a scheduled U.S. Treasury sale of two-year notes Tuesday. Many foreign exchange traders paused in the sharp selling of the dollar last week, which was prompted in part by worries about the longer-term sustainability of the triple-AAA credit rating for the US. For the euro dollar support is seen placed toward USD1.3950, with stops positioned on a break of USD1.3940. A break here could open a deeper move toward USD1.3920 ahead of USD1.3900/1.3890. Offers are seen around the USD1.3995/05 level, and a break above may allow for a move back toward USD1.4020/25 ahead of USD1.4050/60.

Looking ahead, traders said the U.S. dollar could face further downward pressure against the yen and the euro if demand for U.S. government bonds proves weak in the coming auctions. Such results could fuel worries over Washington's ability to keep financing its ballooning budget deficit, according to many dealers and traders. Concern could also grow that long-term U.S. interest rates, which move in the opposite direction from bond prices, would rise to the detriment of the nation's economy if demand for U.S. bonds falls. As a result the US dollar could then fall to a three-month low of JPY93.00. It may also slide as much as USD1.4050 against the euro.

Published on Tue, May 26 2009, 08:22 GMT

Trading Currency − A Summary

Mon, May 25 2009, 12:01 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Session Summary

North Korea's latest nuclear venture impacted the South Korean Won which plunged against the US dollar although currency market players seem to think that the currency will recover in due course. Surprisingly the Yen hardly moved, despite Japan close proximity and Tokyo had been half expecting such a development following Pyongyang's recent missile test. Against the Yen the dollar was at JPY94.63 at 0400 GMT, lower than JPY94.85 on Friday but little changed from around JPY94.60, before the news from North Korea. Even though other Asian currencies did fall analysts have said that the key is how the US will react.

The Euro broke above USD1.4000 in quiet markets and perhaps not ready to push further following last week's dramatic moves.

Friday cable retreated briefly from its Asian high at USD1.5898 to USD1.5757 against the dollar in European afternoon on rumours that UK's GDP data could be worse than market expectation, the data came in line with forecast of -1.9% Q/Q and -4.1% Y/Y. Cable then found renewed buying as dollar weakness continued elsewhere and rallied to a new 2009 high of USD1.5947 on Friday.

The US dollar fell against the Canadian dollar to the lowest in more than seven months at USD1.1187 against the loonie as Canada's retail sales rose for a third straight month in March, although slightly below market expectation.

Currency Market Expectation

Global markets have shifted into risk aversion mode following the North Korea nuclear test with most currencies giving up some gains against the US dollar. However, some traders are seeing this rebound in the dollar as a good point to sell. However, low trading volumes on account of a national holiday in both the US and UK could exaggerate market moves. The US dollar could fall below JPY94.00 later today amid concerns about the US economic outlook.

Although the EURUSD has been experiencing some very bullish behaviour in the past week, having traded between the 1.3900 - 1.4050 region, the 4 hour slow stochastic is showing that a bearish cross may about to occur anytime soon, pointing to a correction.

A currency pair of interest is the NZDUSD as New Zealand prepares to announce a fiscally responsible and relatively austere budget. If so, the Kiwi may take this as a signal for a further move to the upside which is supported by a strong technical picture on the daily chart, with all three moving averages providing excellent support and a break out through the resistance level at 0.60 which now provides an excellent barrier to any short term reversal.

Published on Mon, May 25 2009, 12:01 GMT

Trading Currency − A Summary

Fri, May 22 2009, 09:45 GMT
by Anna Coulling

Master The Markets

Currency Trading - Forex Markets Review

On Thursday, the U.S. dollar sold off along with stocks and bonds as traders fled for safe including gold and silver. The dollar fell to a two-month low against the yen in Asia Friday after Japan's finance minister said the government has no plans to intervene to boost the U.S. currency, prompting non Japanese players to sell it. The U.S. currency also touched a four month low versus the euro, weighed down by speculation of potential cuts in the U.S. credit ratings, according to many currency traders and investors.Non Japanese investors pushed the US dollar back to JPY93.86, the lowest since JPY93.55 on March 19, after Yosano told a news conference that Tokyo is not " thinking about intervening in the foreign exchange markets at this point" - I will leave you to draw your own conclusions from this statement, but the term "at this point" sounds ominous!

The British Pound had a very volatile day crashing after the S&P put the UK on negative watch. The pair found support at USD1.55 and rebounded for the rest of the day to touch fresh week highs just below USD1.5900. UK business investment fell 5.5% in Q1. The dollars to pounds pair traded with a low of USD1.5513 and a high of USD1.5893 before closing the day at USD1.5870 in the New York session.

The Aussie dollar was stronger late Friday as concerns about the U.K.'s AAA sovereign credit rating cast similar questions about U.S. credit worthiness, weighing heavily on the US dollar.

Currency Trading - Market Outlook

The euro is higher against the yen, pound and dollar on Friday, reflecting an emerging shift in sentiment toward the U.S. currency. Many currency traders and analysts now expect the near term risks to the U.S. dollar to remain to the downside.Traders said the greenback could fall below JPY93.55 in the near term. A break below there could open the way for JPY90.00. The euro could rise as far as USD1.4300 in the medium term,yet remains directionless versus the yen within a range of JPY127.00 to JPY133.00 in the short term, partly because Japan's economy looks just as weak as Europe's.

Talk in Asia suggested decent offers from a US account were positioned at USD1.3960, and threatening to counter any further push higher, which in turn prompted long positio traders to pare back. The rate eased through the balance of the overnight session to USD1.3900, recovering into early Europe to USD1.3925. Rate currently trades around USD1.3923. Offers seen placed toward USD1.3945, with stronger interest remaining in place toward USD1.3960. Early mentions of a USD1.4000 approach, though the market not fixated on this level as yet as it appears several have decent offers ahead. Support USD1.3900/890, USD1.3870.

You can keep up to date with all the latest fundamental news on the economic calendar, latest curren

Published on Fri, May 22 2009, 09:45 GMT

Trading Currency − A Summary

Thu, May 21 2009, 16:13 GMT
by Anna Coulling

Master The Markets

Currency Trading - Market Roundup

The British pound has managed a partial rebound against the US dollar after earlier selling off sharply in reaction to ratings agency Standard & Poor's decision to lower its outlook for the U.K.'s triple-A rating to negative from stable. As a result the British pound dropped to a low at USD1.5521 in London trading after the announcement, but has since experienced a corrective rebound and is currently trading at USD1.5655 from USD1.5750 late Wednesday. The euro and other major currencies were generally lower against the dollar as the British ratings news helped inspire a return to a more risk adverse stance among investors. The dollar had been under acute pressure on Wednesday and earlier as investors showed sustained willingness to sell the safe haven currency and take on risk. Thursday morning in New York the US dollar rose to a session high against the euro recently after the release of a U.S. jobs report and in a rebound from the sharp losses earlier this week. The euro dollar fell as low as USD1.3727 Thursday morning in New York, EURUSD was at USD1.3736 from USD1.3772 late Wednesday. The dollar was at JPY94.75 from JPY94.74. The euro was at JPY130.19 from JPY130.44. The dollar was at CHF1.1044 from CHF1.1005 late Wednesday.

In European trading, the euro received support from news that the composite eurozone Purchasing Managers Index reached an eight month high. The index rose to 43.9 in April from 41.1 in March against a forecast of 42.3.

Currency Trading - Market Outlook

The euro dollar has bounced back from the low of USD1.3790 area after testing the lows of the day at USD1.3730 and seems to be easing higher, with the 1.38 and above now in site. A move back to 1.40 in due course seems extremely likely in the next few days. The UK pound is nudging back towards resistance at USD1.5700, a break above this level could open a move on toward USD1.5740/50, but reported sell interest here is expected to provide a decent hurdle to further rate recovery, according to insider currency traders. The US dollar yen is steadily lower as risk appetites dwindle with weaker US stocks, the dollar easing to JPY94.60 area amid muted flows with recent lows seen at JPY94.50. Overnight low area at JPY94.30 seen just ahead of expiring strikes today at JPY94.25 and the pair now focusing on the JPY94.00 price region which, if broken, expected to trigger further demand for the Japanese yen.

Published on Thu, May 21 2009, 16:13 GMT

Trading Currency − A Summary

Thu, May 21 2009, 14:10 GMT
by Anna Coulling

Master The Markets

Currency Trading - Major Currency Pairs

The US dollar fell to a fresh two-month low against the yen in Asia Thursday after U.S. Federal Reserve statements released overnight suggested that the American economy will take more time than expected to recover. The dollar fell to 94.28 against the Japanese Yen, its lowest level since March 20th, after the US Fed lowered its 2009 U.S. gross domestic product forecast to a shrinkage of up to 2.0%, from the previous forecast that GDP will contract between 0.5% and 1.3%. Also weighing on the dollar against the yen were minutes from the Federal Open Market Committee's April meeting indicating that the Fed may make U.S. monetary conditions even easier, by increasing the number of securities it buys from the market.

The Euro moved from USD1.3600 to USD1.3800 on the back of the FOMC news and general increase in risk appetite. Failure from US stocks to finish in positive mood took some of the shine off especially the euro yen. April German PPI fell -1.4% vs. -0.2% forecast. The UK Pound rose from USD1.5475 to almost USD1.5800 with the Bank of England minutes showing a unanimous vote to increase the size of quantatitive easing, with some members favoring even more stimulus, noting that a slow recovery was expected. The Australian dollar held onto its gains in Asia Thursday, helped by a weaker U.S. dollar, while interest rate futures were mixed. The Australian dollar was quoted at USD0.7758, from USD0.7699 late Wednesday. Against the Japanese yen, it was JPY73.32 from JPY73.60.

Currency Trading - Market Outlook

The euro and U.K. pound continued to gain against the US dollar on Thursday in early trading, and the euro-dollar break of USD1.359 could open potential for a move to USD1.40, according to many currency traders. Investors and traders suggested that the dollar vs yen might test in the important technical level of JPY93.55 in the near future, and a break here could speed the U.S. currency's drop because of the many stop loss orders placed below that level. Some currency traders have suggested the U.S. dollar could eventually fall to as low as JPY90.00 if the JPY93.55 support level is breached. Analysts said rising risk appetite is pummeling the U.S dollar, boding well for the local currency to push higher.

The main European data for Thursday sees the flash PMI releases for May, including France at 0700GMT, Germany at 0730GMT and the main EMU number at 0800GMT. For the EMU data, the composite PMI release is seen improving to 42.3 after 41.1 last month, with manufacturing up to 38.5 and services up to 44.4. This would be a third consecutive uptick for the composite index in May, driven by further gains in both the manufacturing and service sectors. A number of recent data releases have added to signs of a moderation in the pace of industrial decline within the region, Thursday pointing to another uptick in the manufacturing PMI.

Published on Thu, May 21 2009, 14:10 GMT

Trading Currency − A Summary

Wed, May 20 2009, 09:56 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Summary

The dollar fell against the yen in Asia Wednesday as a slower than expected contraction in Japan's gross domestic product prompted investors to sell dollars to lock in profits. Equity markets have been soft in Asia so far, also helping boost the Japanese currency. The Japanese Yen is usually the main beneficiary when equity market fall as traders become risk averse as they buy into the safe haven Japanese unit.

Elsewhere, the euro fell against the dollar and yen as risk appetite decreased with the euro moving a cent higher to USD1.3660 last night. The German ZEW survey headline number came in stronger than expected, and Russia's central bank is thought to be buying the EUR as the Moscow Times reported Russia's share of Euro reserves have risen from 42.4% to 47.5%, largely at the expense of USD.

Cable broke to record highs against the USD1.5500 as the market begin to respond to a return to normality in financial markets. The health of the UK banking sector is helping the British Pound more than most as London is a major financial hub. UK April CPI at 2.3% y/y vs. 2.4% forecast.

The Aussie Dollar hit year highs after breaking above resistance at USD0.7735 to touch USD0.7785 before easing as Wall St. finished lower. RBA minutes released yesterday offered added little to future policy direction with a month by month approach now anticipated.

Currency Trading Market Expectation

Traders will now turn their attention to equity markets as there are no major economic indicators likely to have any significant impact today, the only release in the US being the FOMC minutes and crude oil inventories.

Recovery in euro-yen back from lows of JPY129.70 above JPY130.00 allowed euro-dollar to edge back to USD1.3620 ahead of the European open. A further round of euro-yen sales into early Europe sent rates back toward the overnight lows with the eurodollar currently trading around USD1.3590. Bids seen placed between USD1.3585/80, more between USD1.3560/50 with stops below. Further demand then said to be placed from around USD1.3530 through to USD1.3500. Resistance seen placed at USD1.3620, more above USD1.3650 through to USD1.3670.

Cable broke below the initial lows, extending the base to USD1.5452, with rate meeting decent demand on dips toward USD1.5450. Rate continued to bounce between USD1.5450/1.5500 into early Europe with good two way action noted. Bids remain in place around USD1.5450 (USD1.5449 76.4% USD1.5425/1.5525), with stronger interest noted between USD1.5425/20. Below here the next support level is seen at USD1.5400 ahead of USD1.5380. Offers remain in place toward USD1.5500, a break above to open a move toward USD1.5525 (NY high). Focus remains on the 200 day m/a, coming in today at USD1.5553. Traders note that this is the last major pair not to pierce their 200 day m/a.

European stocks are expected to open lower Wednesday, hit by a weak close on Wall Street Tuesday, as investors take a cautious approach after recent healthy gains.

Published on Wed, May 20 2009, 09:56 GMT

Trading Currency − A Summary

Tue, May 19 2009, 08:23 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading Currency Review

The euro extended its gains against the yen in Tokyo Tuesday as rising Asian share prices prompted foreign funds to buy the higher yielding but riskier euro against the safe haven Japanese currency. Higher equity prices, with Japan's benchmark Nikkei 225 Stock Average up 2.7% in early afternoon trading, also encouraged short term currency traders and investors to follow suit. At 0450 GMT, the euro stood at JPY130.74 compared to JPY130.65 Monday in New York. The US dollar, which earlier hit a near one-week high of JPY96.63, stood at JPY96.39, at par with the New York price. The Euro found support at USD1.3420 before rebounding on USD weakness to finish broadly supported. Comments from Weber that he doesn't see positive growth until mid 2010 tempered enthusiasm for the single currency and the euro dollar reached USD 1.3565.
The UK pound was one of the biggest gainers on the improvement in risk appetite gaining against the EUR, USD and Yen to finish near month highs on all 3 pairs. May Rightmove House Prices increased 2.4%. The pound yen made large gains buoyed by the downgrade of Japan's AAA debt. The Australian dollar was firmer late Tuesday, whisked higher as global equities markets clawed back a large part of last week's losses.

Currency Markets - Outlook This Morning

The euro and dollar are little changed against each other on Tuesday, but are both higher against the yen. Currency traders expect the the yen to weaken against the euro and dollar amid a slightly more anxious mood ahead of the release at 2350 GMT Tuesday of Japan's gross domestic product figure for the January to March period. For the rest of the week, currency traders expect the Japanese currency to have trouble regaining its strength earlier in the week, particularly ahead of a long holiday weekend for the U.S. and U.K., where the markets will be closed Monday.

Russian names were noted sellers into early Europe, taking the rate from above USD1.3560 down to USD1.3537, currently trading back around USD1.3550. Offers remain in place at USD1.3580, a break to open a move toward USD1.3600 with talk of stops placed between USD1.3600/10. Further sell interest is suggested from USD1.3620 through to USD1.3650. Support USD1.3530/20, with more toward USD1.3500 ahead of USD1.3480.

The market focus today is on the U.S. housing starts data for April, due at 1230 GMT, with any better than expected reading likely to boost the share markets and weigh on the yen against the dollar and on the dollar against other currencies.

Published on Tue, May 19 2009, 08:23 GMT

Trading Currency − A Summary

Mon, May 18 2009, 08:32 GMT
by Anna Coulling

Master The Markets

Currency Market Report

The US dollar fell below the psychologically-important JPY95.00 mark for the first time in two months against the Japanese yen in Asia Monday, as drops in regional shares and signs of swine flu spreading in Japan fueled demand for what dealers see as safe haven currencies. The U.S. currency fell to JPY94.55, its weakest level since JPY94.15 on March 20. Currency traders and investors often buy Japan's currency at times of crisis. Even despite the prospects that any further increases in swine flu in Japan cases could hinder the nation's economic activity, buyers snapped up the yen on speculation that such an outlook should aid the yen by lifting global demand for safe haven currencies. The yen also got a boost as Japan's benchmark Nikkei 225 Stock Average slid as much as 2.9% by early afternoon in Asian hours, while other Asian indexes like those in South Korea and Hong Kong also fell.

On Friday the euro fell against the dollar and the Japanese yen after a German government report showed Europe's largest economy contracted last quarter by more than economists estimated. The Euro fell heavily from highs at the start of the US session above USD1.3600. Support at USD1.3500 broke and the pair now look towards a move lower to the 200 day moving average at USD1.3420. The UK Pound also fell to the resurgent USD but managed to hold up relatively well against other currencies. The euro pound and pound aussie dollar managed to make small but solid gains. Renewed risk aversion knocked the Australian dollar during Asia trading Monday, setting the theme of likely further losses for commodity currencies this week and potential gains for interest rate futures.

Currency Markets Outlook

The euro is lower as risk aversion favors the dollar and the yen on Monday.Currency traders will be waiting to see whether the US dollar will continue to benefit from a return of risk aversion this morning, while the Swiss franc shares the spotlight in gaining against the euro of late. The euro dollar recovered with the euro yen ahead of the European open, traders noting Asian sovereign demand appearing around USD1.3430, with rate pressing up to USD1.3470/75, currently trading around USD1.3455. Offers seen placed to USD1.3475, a break above to allow for a move on toward USD1.3490/00 (USD1.3493 late New York recovery high). Above here and we may see the rate push on toward USD1.3525. Support at USD1.3430/20, with more toward USD1.3400.

The dollar yen nudges up to 94.97 with the euro yen back near JPY127.84, as speculators cover shorts before Moody's briefing . There is some talk in the market on what the briefing might say, as Moody's will discuss its new way of rating Japan government bonds. Trader puts USDJPY resistance at JPY95.50 for now.

Finally, currency markets will be keenly watching for any signals from policy makers on the prognosis for Australia's economy, although traders searching for renewed direction might be disappointed, analysts said.

Published on Mon, May 18 2009, 08:32 GMT

Trading Currency − Morning Summary

Fri, May 15 2009, 11:32 GMT
by Anna Coulling

Master The Markets

Previous Currency Trading Morning Roundup

The Japanese Yen weakened slightly against both the US Dollar and Euro in Asia Friday as higher regional share markets prompted players to trim their holdings in the safe-haven Japanese currency. Japan's benchmark Nikkei 225 Stock Average was up 1.6% in early afternoon trading as other Asian equity markets rose as well.

The Euro bounced off the lows in Europe to finish in a bullish mood. Support close to USD1.3500 discouraged attempts lower and strong equities sent the pair higher again. Comments from various ECB members overnight failed to move the market.

Cable weakened against the US dollar after Bank of England Governor, Mervyn King gave a cautious assessment of the UK economy's recovery prospects, stating that although there were signs that the pace of decline was starting to ease, the recovery would, nevertheless, be slow and highly uncertain.

The Aussie Dollar was slightly firmer in late Asian trade Friday, helped higher by a very modest gain in global equities markets and general risk sentiment. However, the domestic currency remains capped by some very significant historic and technical levels that need to be breached if there is to be a more sustained rally.

Currency Market Outlook

The Euro, along with the British Pound, is little changed Friday as investors pause to reflect on their next move. With the Euro facing some major resistance levels we can expect a period of consolidation.

EURUSD continues to trade with a heavy feel, with some of the weight seen from euro-yen. Support noted toward USD1.3580 (61.8% USD1.3526/1.3667), a break here to open a deeper move toward USD1.3560/50, where stronger demand is seen placed.

EURJPY heavy tone in euro-dollar sees the cross extending lows under JPY130.00 now, with slippage extending to JPY129.81 at writing. Light interest noted on the downside ahead of bids at Y129.00/128.90. Technical analysts note the cross is holding under the 200-day moving average, with the 21-day giving way here at JPY129.99.

Cable support seen placed toward USD1.5200, a break below to open a deeper move toward USD1.5180 ahead of USD1.5150. Resistance remains toward USD1.5250 ahead of USD1.5280.

Currency traders have also expressed doubts over the dollar's strength which are likely to linger due to concerns over the long-term fiscal health of the U.S., highlighted earlier in the week by a Financial Times opinion piece arguing that the country may be at risk of losing its AAA credit rating.

Published on Fri, May 15 2009, 11:32 GMT

US Dollar Index − 13th May 2009

Wed, May 13 2009, 08:57 GMT
by Anna Coulling

Master The Markets

Yesterday's wide spread down bar on the US dollar index, added further momentum to the general dollar weakness that we are now seeing across all the major foreign exchange markets, with little in the way of technical signals to suggest that this is likely to end in the short term. Indeed all the signs at present are that this is set to continue for some time, with all three moving averages now weighing heavily on the index, with the 80.50 region and above providing the first test of support to any sustained move lower. Should this price region be breached then we could see a move lower still to re-test the 78.50 area last seen in December 2008. Yesterday's fall has been attributed to a report in the London Financial Times suggesting that the US could lose its AAA status, which seems highly unlikely, coupled with continued optimism in the equity markets which has a pull through effect into commodities, with oil prices continuing to surge higher, despite the increasing stockpiles, and with many commentators suggesting that the markets are now trading on sentiment rather than fact - time will tell. All the factors are now combining into a self sustaining rally which may collapse in due course, resulting in a return of US dollar strength in due course.

Published on Wed, May 13 2009, 08:57 GMT

Currency Markets Morning Report

Wed, May 13 2009, 08:32 GMT
by Anna Coulling

Master The Markets

Currency Markets News

The US dollar fell to a two-week low against the yen in Asia Wednesday following a Financial Times editorial saying the U.S. may be at a risk of losing a triple A rating for its government bonds, falling to a low of JPY95.78 against the Japanese yen in the early Asian trading session, with some currency traders suggesting that technical factors may even push it below JPY95 very briefly Thursday. In Europe the euro made new recent high, from USD1.3600 to USD1.3710, but couldn't follow through, settling in the low 1.36's. ECB Weber's comment that there was no need to expand asset purchases into other debt types was supportive. The UK pound rose against the US dollar after UK data showed jobless benefit claims rose by a smaller than expected 57,000 in April, beating forecasts of an 80,000 rise. The pound rose to a four-month high against the dollar to USD1.5354 in New York morning while it touched an intra-day high of 0.8915 versus the euro currency before settling back in later trading. A weaker U.S. dollar also helped push the Australian dollar higher in Asia Wednesday as traders await renewed direction from any signs the global economy may be stabilizing. The Canadian dollar strengthened against the dollar after fundamental news data showed Canada's March trade surplus was more than double that expected.

Currency Markets Outlook

The euro and pound are higher against the dollar Wednesday, indicating some lingering willingness to take risk. Some currency traders attributed the U.S. dollar's fall in part to a report in the Financial Times that talked about America's AAA credit rating potentially being at risk unless the government put its finances in order. The Japanese yen will continue to fall as global risk appetite improves, according to several market analysts. The correlation between equities, risk and the Japanese currency remains strong and resumption in the carry trade seems more than likely. Some traders and dealers have suggested that a technical factor related to foreign exchange options contracts could bring the dollar down below JPY95 in the trading session later today.

Eurodollar traders note that a semi official name was seen with sell interest above USD1.3700 on the recent push higher. Rate currently trades back around USD1.3688 after being pressured back to USD1.3675 from USD1.3710. Many market commentators and currency analysts are now suggesting that more dollar selling is likely over the coming weeks, assuming that economic recovery signs continue to emerge,but they also say the dollar's losses probably won't be steady or severe, with the US dollar index supporting this bearish view of the US dollar at present.

For sterling bids are seen placed between USD1.5280/75 (USD1.5277 38.2% USD1.5201/1.5324), a break below to allow for a deeper move toward USD1.5260/50. Stronger support seen placed at USD1.5230 ahead of area toward USD1.5200. Resistance is seen at USD1.5315/25 ahead of USD1.5350/60 (USD1.5354 NY high). Above here is the January high at USD1.5374 which is now on the horizon. Looking ahead, players will pay attention to U.S. retail sales data due later in the global day on the economic calendar. The core figure which excludes auto sales may rise 0.2% on month in April, according to economists.

Published on Wed, May 13 2009, 08:32 GMT

Trading Currency − US Dollar Index

Tue, May 12 2009, 10:43 GMT
by Anna Coulling

Master The Markets

Following Friday's wide spread down bar yesterday's candle provided little in the way of respite for continued US dollar weakness, closing the day only marginally higher and a long way from any suggestion that we are likely to see any reversal of the US dollar's fortune in the short term. With all three moving averages now pointing steeply lower and with the 14 and 40 day moving averages having crossed this morning's price action comes as no great surprise with further US dollar weakness across the major currency pairs.

With very little in the way of support directly below we could now see a deeper move lower, possibly to re-test the minor support level at 78.50 and if this fails to hold we could see a lower move still even as far as the 73.50 to 74.0 price point in due course. The great unknown, of course, as far as dollar weakness is concerned is the effect of the major equity markets with many market commentators now suggesting that these are possibly overbought following the strong rally since March which has partly been fuelled on sentiment rather than key fundamentals. Should equities fall significantly, then this could translate into a return into the dollar with a consequent reversal in the dollar index, but there are no signals from a technical perspective that this is likely to happen at present.

Published on Tue, May 12 2009, 10:43 GMT

Trading Currency − Morning Report

Tue, May 12 2009, 08:14 GMT
by Anna Coulling

Master The Markets

Currency Market Review

The yen gained against the dollar and euro in currency markets in Asia Tuesday, as weak regional share markets curbed players' risk appetites and prompted them to buy the Japanese currency, which they consider a safe-haven asset. The euro vs dollar drifted off the USD1.3670 recent high in early Europe to USD1.3560, recovering to USD1.3600. Currency speculator George Soros' comment that the USD should not weaken much further against the EUR helped the stall in risk currencies. ECB president Trichet said that non-standard policies would remain for as long as needed. The UK pound pulled back fairly sharply helping the euro pound to test 0.9000 on the topside. The outlook for sterling is becoming more mixed with the recent run up in cable and the pound yen is in danger of a correction without fresh stimulus to continue. The Japanese Yen continued to slip on the USDJPY even as the USD strengthened. Weak stocks are once again prompting strength in the Yen, especially in crosses such as the euro vs yen and pound vs yen. The Australian dollar was weaker in Asia late Tuesday and off recent seven-month highs as the risk appetite driven rally in global equities markets of the past week stalled. Wall Street indices eased back from their recent highs in U.S. trading on Monday, checking any advance in higher yielding currencies, which have traded in close correlation with the benchmark bourses.

Currency Market Outlook

Major currencies, including the euro, pound, dollar and yen, are little changed Tuesday as currency traders pause to assess the shifting sands in the markets. Currency traders and analysts are more bearish on the dollar vs yen and the yen crosses than yesterday. Many forex traders are now focused on share market moves, echoing other dealers, and are particularly sensitive to the Dow Jones Industrial Average futures during Asian hours. The dollar and euro may fall more against the yen if U.S. stock futures, which were off only around 25 points, slip further. The euro vs dollar recovery extended to USD1.3629 on reported east European buys, with the rate currently trading back around USD1.3615. Offers now seen placed to USD1.3630 with interest extending to USD1.3640. The dollar yen is so far holding off the Asian lows through the early part of the European session, with Japanese bids still noted into JPY97.00. Technical traders also highlight the JPY96.80 area, representing trend line support taken from this year's Jan 21 lows. A break below here could expose the 38.2% retracement of the Jan-April rally at JPY95.97. Investors and currency speculators in the Australian currency and bonds are awaiting the release of the federal government's budget for the fiscal year starting July 1, due later Tuesday. While dealers expect share prices will likely dominate foreign currency trade decisions this week, players will also be watching U.S. retail sales for April due Wednesday.

Published on Tue, May 12 2009, 08:14 GMT

Trading Currency − Afternoon Report

Mon, May 11 2009, 18:03 GMT
by Anna Coulling

Master The Markets

Currency Markets - Review Of Trading Session

The US dollar rose Monday versus most major rivals, boosted by a flight back into assets perceived as less risky on renewed worries about the financial sector and the world economy, having fallen through important support levels last week. However, many currency strategists cautioned that the dollar may have further to fall on ideas that the global economy is beginning to bottom out. The dollar and the Japanese yen have tended to gain ground during periods of financial and economic uncertainty, often rallying as world equity markets fall. U.S. stocks retreated after the opening bell and European markets remained in negative territory. Worries about the financial sector follow a report in The Wall Street Journal that said U.S. banks received concessions from the U.S. Federal Reserve regarding government demands for fresh capital infusions. Fed Chairman Ben Bernanke is scheduled to deliver a speech on the recent bank stress tests late Monday.

Early Monday in New York the euro is down at USD1.3584 from USD1.3627 late Friday, and at JPY132.75 from JPY134.19. The dollar is at JPY97.72 from JPY98.52 late Friday. Against the Swiss franc, the dollar is trading at CHF1.1092 from CHF1.1067 late Friday, while the pound has declined to USD1.5104 from USD1.5225.

Currency Markets - Trading Outlook US & Asia

Most currency watchers are interpreting Monday's dollar rebound as being less news driven and more corrective in nature. So far Monday, foreign exchange players are seizing the chance to lock in some profits on the recent rally against the dollar, while awaiting fresh buying opportunities. The euro vs Japanese Yen recovered from US lows extending to 80-points, despite stocks holding a negative tone. Offers are said to come in around the JPY133.00 area, more at JPY133.20/25 with stops from short term names placed on a break of JPY133.30/35.

Despite US stocks remaining soft on the day, market players lean towards buying the euro against the US dollar on the dip, according to many traders, and those hoping for a a larger dip below USD1.3550 are now watching the pair trade back over USD1.3620, afraid of missing the boat! Nevertheless, unless equities turn around, it may be difficult for the euro to press higher. Euro offers are seen from USD1.3650 to overnight highs near USD1.3670 and extend to USD1.3680.

The UK Pound is getting confirmation of stops placed on a break of USD1.5040. Earlier reports had placed support between USD1.5065/45 with stops on a break of USD1.5040. Further demand noted at USD1.5025/20, with a close below USD1.5023 providing a negative signal to technical traders. The currency is currently trading around USD1.5108 with interim support noted around earlier lows at USD1.5080. Resistance remains at USD1.5130/35 ahead of USD1.5150.

Published on Mon, May 11 2009, 18:03 GMT

Trading Currency − Morning Report

Mon, May 11 2009, 08:59 GMT
by Anna Coulling

Master The Markets

Currency Trading - Morning Report

The euro almost touched a six week high against the US dollar in currency trading during the Asia session Monday, as non Japanese currency traders unloaded bets against the single currency after its recent climb above some key technical levels, rising to to touch USD1.3670 in early Asian hours, its highest level since March 24. Most Asian currencies also surged Monday, driven by strong gains in equity markets across the region. Among top performers, the Korean won hit a fresh six-month high against the U.S. dollar, while the Singapore dollar hit a four-month high.

On Friday the Euro held to the USD1.3400 area before the US data prompted a rally that did not stop until above USD1.3600. The catch-up of the Euro post ECB allowed most of the crosses to gain led by the EUR/GBP and EUR/JPY. The British pound remained under pressure versus most of the majors, but made headway against the big losers - the US dollar and Japanese yen - taking the dollar pound above 1.5155/65 and the pound yen above 150.00. The Japanese yen remained steady against the dollar as optimism in the recovery of the global economy helped increase risk appetite, encouraging investors to sell both of these traditional "safe haven" currencies.

The Australian dollar was firmer in Asian trade late Monday but slightly below a fresh seven-month high after stronger than expected U.S. employment data accelerated the recent surge in investor optimism.

Currency Trading - Outlook For Currency Markets London

The euro, pound and dollar are lower against the yen Monday, as investors add a little more risk aversion to their portfolios. As a result, the euro is likely to see more short-run downside though it's likely to be limited. Some currency traders and market analysts suggest the dollar's sharp losses Friday may lead to a bounce this week, as investors take profits. On the other hand, technical analysts warn that Friday's move could be the beginning of a much bigger move up by the euro against the dollar, especially if it can break above certain key technical levels.

The euro drifted off highs through the balance of the session, touching a pullback low around USD1.3625/20 before recovering again into early Europe, and is currently trading around USD1.3640. Bids are seen placed between USD1.3620/15, with more toward USD1.3600. Offers are seen at USD1.3650, with interest extending to USD1.3658, more toward overnight highs at USD1.3670, with offers noted between here and also at USD1.3680. A move above here could see a push on toward USD1.3700 ahead of USD1.3740/50.

For the euro vs pound, resistance is said to remain between stg0.8975/85, but a break above could open a move on toward stg0.9000, with offers noted on approach, with further interest extending toward stg0.9010.

Published on Mon, May 11 2009, 08:59 GMT

Trading Currency −Morning Report

Thu, May 7 2009, 07:53 GMT
by Anna Coulling

Master The Markets

Currency Markets - Foreign Exchanges Overnight

The euro fell against the yen in Asia Thursday as investors sold the currency to cut down risks ahead of the European Central Bank's rate-setting meeting later in the day. In the early Asian hours, many currency traders were reluctant to take risks despite a rise in Japanese stock prices as it is unclear what kind of unconventional quantitative easing measures the ECB may take later this morning in Europe. In the US session yesterday, the euro rebounded strongly from USD 1.3245 to USD 1.3375 against the dollar after release of stronger than expected euro zone PMI service data (43.8 in April compared to 40.9 in previous month) but pared its gains in the later New York session ahead of the ECB's policy meeting on Thursday. The British Pound rose against both the dollar and euro after the release of strong UK service sector data, with the CIPS services PMI activity index rising to 48.7 in April from 45.5 in March, the highest reading since August 2008. The Japanese Yen strengthened with Japan away for the third and final day of their national holiday, as the dollar vs yen slipped towards JPY98. Japanese yen cross currency pairs managed to remain fairly stable as their respective majors rallied on good sentiment. In Australia, a shock fall in unemployment punched the Australian dollar to fresh seven-month highs and prompted a sharp fall in interest rate futures Thursday, as market analysts predicted the downturn in Australia may not be as severe as first thought.

Currency Markets - Foreign Exchanges This Morning

The euro is lower against the dollar and the pound Thursday, and little changed against the yen, reflecting mixed patterns that reveal the ever shifting attitudes toward risk, making currency trading this morning extremely difficult. The euro could rise to JPY133.00 and the US dollar to JPY99.00, if the announcement of U.S. stress test results, due later in the trading day, helps wipe out uncertainty over the U.S. financial markets, according to many financial analysts and currency traders. For the euro vs dollar, ongoing weakness in euro-sterling seen as the main weight on euro-dollar into the European session, triggering light stops under USD1.3270 down to USD1.3262. Bids now eyed into USD1.3250/45, more around USD1.3215/00.

Euro-sterling now trades at lowest levels since February 24, with light demand coming in around stg0.8750, but stronger into stg0.8730. Cable said to have found Asian bids around the lows overnight. Stops now placed on a break of USD1.5160, with technical analysts noting the 76.4% retracement of the move from December to January coming in at USD1.5196. The Bank of England rate announcement today( with no change expected), provides the main point of interest, coupled with the statement, as to whether the committee will announce an extension of quantitative easing. Until Thursday's key fundamental news items are released, the pound is likely to hold in a tight trading range against all the other major currencies.

Published on Thu, May 7 2009, 07:53 GMT

Trading Currency − Afternoon Roundup

Wed, May 6 2009, 14:26 GMT
by Anna Coulling

Master The Markets

Currency Markets - Trading This Morning

The euro hit an intraday high against the dollar Wednesday after a better-than-expected private-sector jobs report renewed risk appetite in the market. In the Far East the Japanese yen declined, as the Australian dollar hit a fresh session high versus the dollar - all typical moves when traders take on more risk, selling traditionally low-yielding funding currencies in favor of higher yield. Private-sector jobs in the U.S. fell by a less-than-expected 491,000 slots in April, according to a national employment report published Wednesday by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers - far lower than the 650,000 loss forecast by economists on the Dow Jones Newswires survey, and perhaps an indication of things to come on Friday when the Non Farm Payroll circus comes to town! This helped to reverse some of the overnight rebound in safe-haven assets on reports that U.S. regulators told Bank of America Corporation it must address a USD35 billion capital shortfall, based on results of the government's stress tests. The euro rose as high as USD1.3374 and JPY132.42, whilst the US dollar gained to highs of JPY99.08, with the Australian unit rising to USD0.7472, just shy of the seven-month high struck a day earlier.

Wednesday morning in New York, the euro was at USD1.3366 from USD1.3324 late Tuesday, while the dollar was at JPY98.94 from JPY98.96. The euro was at JPY132.22 from JPY131.89. The U.K. pound was at USD1.5075 from USD1.5082 late Tuesday, while the dollar was at CHF1.1301 from CHF1.1337.

Currency Markets - Outlook For This Afternoon & Evening

The Euro Yen gains in the wake of the better ADP data and rallying stocks extended to JPY132.41, with the cross subsequently easing back below JPY132.00 to hold around JPY131.80. Topside we are seeing offers around the JPY132.70/80 area, in line with the week's highs, with stops coming in through JPY132.90 and JPY133.10. Technical analysts note the 200-day is still key resistance, coming in today at JPY132.76.

The dollar yen high point was seen at JPY99.08 in a reactive move after the release of the ADP data, but traders expressed some muted surprise as the strength of the reaction to what are often an ignored, volatile data point, though this is the only one of the day for the US. Flows limited in the dollar pair now but traders continue to reiterate that order books are thin at higher levels, awaiting the return of the Tokyo market.

The euro dollar is currently extending gains to USD1.3375 area in the wake of the ADP data as risk-appetites rebuild after sagging overnight. Offers mentioned earlier at USD1.3380 said to extend to the USD1.3410 area and traders reminding us that the area of USD1.3440 "a level to watch," after expiries yesterday capped the pair. No chatter of expiries at that level today but still worth watching, traders says. Euro last at USD1.3365 and now falling back to the open of this morning in London.

Published on Wed, May 6 2009, 14:26 GMT

Trading Currency − Morning Report

Wed, May 6 2009, 08:07 GMT
by Anna Coulling

Master The Markets

Currency Markets - Review Of Trading Session

Currency traders took profits Tuesday on intraday moves ahead of the European Central Bank meeting Thursday. In addition, on Friday, the latest U.S. payrolls report will be released, and economists doubt there will be any positive news, leading traders to hesitate in extending previous gains. Yesterday afternoon Federal Reserve Chairman Ben Bernanke said U.S. economic growth is likely to resume later this year and went on to say that the weakened housing market appears to be reaching a bottom. Moreover, a report on activity in the U.S. service sector shrank less steeply than expected in April.

The euro reached a one-month high in early currency trading yesterday, but quickly pulled back ahead of Thursday's ECB meeting. The ECB is expected to cut its main interest rate by 25 basis points to a record low of 1 percent. UK Sterling ended the evening session slightly stronger, spiking from USD1.5000 to USD1.5160, and settling at USD1.5070. UK construction PMI was a positive surprise. The Japanese yen rose against the U.S. dollar and the euro in Asia on Wednesday, boosted by its safe haven status amid a report that the Bank of America (BAC) may be forced to raise an additional USD 34 billion. The yen, a traditional outperformer when risk aversion hits global markets, was also boosted by uncertainty ahead of the European Central Bank meeting Thursday.

The Australian dollar cooled in Asia Wednesday, falling from fresh seven months highs it set during New York trading as looming results from the U.S. banking stress tests unnerved investors.

Currency Markets - London & New York Trading Session

European stocks are expected to open lower Wednesday in the foreign exchange markets, as concerns regarding the U.S. bank stress tests gather momentum. The euro, pound and dollar are all lower Wednesday against the yen, which gained after reports that Bank of America may need to raise a further USD35 billion in capital. Early European dealing has seen the euro vs dollar trying to break above the 1.33 price point at time of writing. Further stops are placed at risk on the downside through USD1.3230, and ahead of bids from USD1.3215/00. Offers are seen placed at USD1.3300 now under pressure, with more around the USD 1.3330 level, with short-term stops through USD1.3335/40.

Euro-sterling continued to trade heavily after Tuesday's slippage to stg 0.8828, though the cross did at least manage to hold above, trading in a stg 0.8830/525 range. Trend line support from the February lows are now seen under pressure, coming in around the base in the cross, with a break set to expose the April lows at stg 0.8787.Cable sees light offers at USD1.5050, stronger at USD1.5080, with bids into USD1.4990 and USD1.4970.

The main focus for currency markets in coming days will be the European Central Bank's policy meeting Thursday, and any hint at quantitative easing or bearish talk on the economy will further cement the risk averse mood. Analysts will focus on any accompanying statement that will indicate it will keep cutting rates or adopt a different approach like buying securities to stimulate growth. If the ECB indicates they will keep to a much more traditional policy then look for the euro to push as high as the USD1.35-USD1.36 range.

Published on Wed, May 6 2009, 08:07 GMT

Morning Report

Tue, May 5 2009, 07:28 GMT
by Anna Coulling

Master The Markets

Yesterday & Overnight FX Trading

The euro fell against the U.S. dollar and the yen in Asia Tuesday, giving back some of its recent gains, while the Australian dollar received only a minor boost after the country's central bank kept interest rates unchanged at 3%. The Reserve Bank of Australia's decision was in line with expectations, and the central bank also left the door open to further cuts. Still, the news is mildly positive for the Aussie dollar, as it will maintain positive interest rate spreads against other major currencies for the time being in the currency markets.

Meanwhile, the euro was hurt by concerns over the euro zone's poor economic outlook ahead of a key meeting of the European Central Bank later this week. The single currency was largely unmoved by news that Swiss bank UBS AG (UBS), one of the hardest hit in the global financial crisis, made a net loss for the first quarter and revised lower year-earlier earnings due to accounting errors and a reorganization of its private bank. The euro was also under pressure during early trading in Europe as the EU revised GDP forecasts for the Eurozone and countries downwards. Comments from President Obama proposing to outlaw offshore tax avoidance techniques also saw the USD strengthen, and EUR fell a cent to around USD1.3215.

The UK pound was poised below USD1.500 most of the day until surging US stocks encouraged the market to break above this key area, late in the US session. The BOE meets on Thursday although currency traders and the markets are expecting no change to the 0.5% rate.

The dollar yen fell in yesterday's trading, with Japan celebrating a holiday, and so volatility and liquidity was low in the first half of trading. The pair was unable to move above the JPY99.55 level and fell in early afternoon trading in New York.

The Australian dollar rose and bond prices fell Tuesday due in part to the Reserve Bank of Australia's decision to keep interest rates on hold, though jitters surrounding the U.S. banking system tempered the Australian currency's gains.

Trading Outlook This Morning For Forex Trading

The euro and pound are lower Tuesday, reflecting a pause in the recent decline in aversion to risk. While both may have a bit more room to gain against the dollar, to USD1.3519 and USD1.5037 respectively, a period of consolidation is likely before more advances, according to many currency traders.

The euro dollar is extending lows into European dealing as stops under USD1.3350 are put under pressure. Trader's reports next area of demand coming in around USD1.3310/00 with additional stops lurking below. Light order boards are noted on an extended move due to the strong rally seen in US trading time Monday USD1.3213-USD1.3426).

The euro pound pair is hitting fresh lows for the day under the 0.8880 price point, with traders reporting stops building in the 0.8870 area this morning.

Central and Eastern European currencies and debt will be the focus for Tuesday, as London traders return from a long weekend to grapple with the gloomy 2009 economic projections for the region issued by the European Commission Monday. You can keep up to date with all the latest fundamental news, latest currency news and live currency charts by simply following the links. In addition I have provided details of an excellent ECN broker.

Published on Tue, May 5 2009, 07:28 GMT

Trading Currency − Afternoon Report

Fri, May 1 2009, 15:38 GMT
by Anna Coulling

Master The Markets

Currency Trading - Previous session overview

A sustained global appetite for risk is keeping the dollar under pressure against most currencies save for the Japanese Yen early Friday in currency trading that has been thinned considerably by the May Day holidays. An optimistic attitude has prevailed despite some concerns that results of the US bank stress tests had been postponed from Monday and that Chrysler was forced to file for bankruptcy Thursday. In addition a lessening of concern by investors over the seriousness of swine flu appears to be the main driver of the increase in the appetite for risk. The reason is that so far the number of flu-related deaths has been, so far, relatively low and the global spread of the virus remains fairly gradual, leading to a more relaxed attitude among investors, at least for the time being.

Other factors buoying risk sentiment at the expense of the dollar include the April UK purchasing managers' index report which exceeded expectations, leading to a move higher for cable. The British Pound has already been moving higher for most of the past week and although it is still below Thursday's intraday high of USD1.4953, some currency watchers see recent gains as enhancing the chances of an imminent re-test of the USD1.5000 price point. The pair have failed at this level on several rallies since early January.

Early Friday, the euro is at USD1.3262 from USD1.3237 late Thursday, and at JPY131.92 from JPY130.48. The dollar trades at JPY99.47 from JPY98.62 late Thursday. The dollar is at CHF1.1371 from CHF1.1413, while cable is at USD1.4890 from USD1.4803.

Currency Trading - Market Outlook

With both the ISM and UOM (University of Michigan) coming in slightly better than forecast many will be hoping that these are indeed the first green shoots of the recovery, or at last evidence that the global economy is not falling into a depression. However, with most of Europe closed for May Day on Friday and a public holiday in the UK on Monday, currency trading levels are expected to subside. In addition Japan is also closed for much of next week due to its Golden Week holidays. As a result, there could be a slide in risk taking as investors square positions and cover themselves in case of some turn for the worse in the global flu situation.

EUR/USD holding at USD1.3266 but flows are very light. Cable at USD1.4881 resistance level and trying once again to challenge 1.49 - 1.50.

Published on Fri, May 1 2009, 15:38 GMT

Trading Currency − Morning Report

Fri, May 1 2009, 08:47 GMT
by Anna Coulling

Master The Markets

Currency Trading - Overnight Currency Markets

The US dollar and euro both rose against the yen in Asia Friday, as currency traders kept selling the safe-haven currency because the threat of swine flu on the markets has not been as bad as feared. However, according to many traders, the rises in the US dollar and single currency will not last, because much-awaited U.S. and European events next week are expected to prompt investors to sell these currencies once again. The USD currency was under pressure during early Europe due to month-end fixing dynamics. There was talk of country reserves managers selling USD across many of the major currencies. The euro rose from around USD1.3300 to USD1.3385, before the falling S&P500 dragged it back to the USD1.3200 area in the evening session.

Sterling rose to a two-week high against a broadly lower US dollar as risk appetite resumed on positive sentiment for the global economy, which also boosted share prices. The Japanese Yen weakened considerably in Asia, as the Nikkei surge prompted dollar yen buying and majors helped the crosses extend gains. The Bank of Japan held rates at 0.1% but cautioned that downside risks still remain. CPI (March) came out at -0.3% vs. -0.1% previously. The Australian dollar pushed higher Friday in thin markets as traders awaited a slew of domestic data next week and the Reserve Bank of Australia's policy decision for firm direction.

Currency Trading - Morning Outlook

In early currency markets this morning, the euro is higher against the dollar and yen, as risk-taking picks up on Friday. Meanwhile, the euro is also likely to face downward pressure next week because of the European Central Bank's policy setting meeting. The U.S. is expected to release results of so-called "stress tests" next week to determine whether U.S. banks need more capital to guard against a possible economic deterioration.

The euro dollar has extended gains this morning to make a brief show above USD1.3300, touching USD1.3302. Underlying tone remains firm with the rate currently trading around USD1.3298. A break above and through USD1.3300 may see a move on toward USD1.3320.

The UK Pound is currently breaking back above USD1.4800 but momentum faltered ahead of overnight highs/offers at USD1.4820/25, easing back to USD1.4802 after touching USD1.4818. Above USD1.4825 the rate may push on toward USD1.4850/55. Above here and we could see a move toward USD1.4890/00. Support moves up to USD1.4790.

Japanese margin accounts are said to be sellers of yen crosses into this morning's rally for the currency pair, with euro-yen so far capped ahead of JPY132.00. Fibonacci resistance has been noted at JPY132.44, with the 200-day moving average of more significance at JPY133.38 after the false break last month. Euro-yen is currently trading below the 200-day on a closing basis since August 2008.

Before next week's data and policy decision, traders are watching the ISM Manufacturing Index, which could provide further evidence that the U.S. economy is stabilizing.

Published on Fri, May 1 2009, 08:47 GMT

Trading Currency − Morning Report

Thu, Apr 30 2009, 07:37 GMT
by Anna Coulling

Master The Markets

Currency Trading - Market Report

On Wednesday the common theme across the markets was a return for global risk appetites, which resulted in a broad sell off in the US dollar against most currencies other then the yen Wednesday, with the dollar receiving only limited relief from a guarded but slightly more upbeat Federal Reserve policy statement. The Japanese yen gained back some ground lost overnight to the US dollar and euro Thursday, after more bad news emerged on the U.S. auto industry, with Chrysler now on the verge of bankruptcy, unless the deal with Italian giant FIAT is agreed today. After the Wall Street Journal reported that the U.S. Treasury Department's talks with lenders to keep Chrysler LLC out of bankruptcy had broken down, some currency traders and investors dumped dollars and euros for the yen, which they consider a safer haven currency in these uncertain times. Although the foreign exchange market had largely priced in failure for the troubled auto maker, some currency traders had persisted in believing Chrysler could avert this outcome, and today will be seminal in terms of the long term future for the car industry worldwide.

The Euro continued to rise rapidly as sentiment improved and Euro zone confidence improved. However of concern was German GDP growth which was downgraded to -6.0% vs. -2.25% initially. The Euro rose broadly on Wednesday and hit session highs of 1.3342, whilst in the UK sterling strengthened against the US dollar and other major currencies in line with a recovery in currencies perceived to be higher risk, though currency traders and investors were cautious ahead the Federal Reserve policy decision. The Japanese Yen was sold all day as Japan was closed for a national holiday and sentiment/stocks improved.

In Australasia, the Australian dollar was stronger in Asia late Thursday, as the appetite for equities and growth proxy currencies continued to improve on the back of better than expected corporate earnings in the U.S. and European sessions.

Currency Trading - Market Outlook

The euro is currently higher in currency trading Thursday, but its recovery seems to be slowing as the European market gets ready to open Thursday. Currency traders are watching the USD1.3350 level for a possible trigger to higher gains. The Japanese yen could continue to gain into the weekend as Japanese

FXstreet.com

Fundamental

Trading Currency - A Summary

Forex Markets − Afternoon Report

Forex Markets − Morning Report

Forex Market Analysis

Forex Market Analysis

Forex Market Analysis − Morning Report

Forex Market Analysis − Morning Report

Forex Market Analysis

Forex Market Analysis − Forex News

Forex Analysis − Currency Trading Strategies

Currency Markets − Morning Report

Currency Markets − Morning report

Currency Markets − Aftenoon Summary

Trading Currency − A Summary

Currency Markets − Morning report

Currency Markets − Morning report

Currency Markets − Morning report

Currency Markets − Morning report

Trading Currency − A Summary

Trading Currency − A Summary

Trading Currency − A Summary

Trading Currency − A Summary

Trading Currency − A Summary

Trading Currency − A Summary

Trading Currency − A Summary

Currency Markets − Morning Report

Trading Currency − A Summary

Currency Markets − Afternoon Report

Trading Currency − A Summary

Currency Markets − Morning Report

Trading Currency − A Summary

Currency Markets − Afternoon Report

Currency Markets − Morning Report

Currency Markets − Afternoon Report

Trading Currency − A Summary

Trading Currency − A Summary

Trading Currency − A Summary

Currency Markets − Morning report

Currency Markets − Afternoon Report

Currency Markets − Morning Report

Currency Markets − Afternoon Session

Currency Markets − Morning Report

Currency Markets − Afternoon Report

Currency Markets − Morning Report

Trading Currency − A Summary

Currency Markets − Afternoon Report

Trading Currency − A Summary

Currency Markets − Morning Report

Currency Markets − Afternoon Report

Trading Currency − A Summary

Currency Markets − Morning Report

Currency Markets − Morning Report

Trading Currency − A Summary

Currency Markets − Morning Report

Trading Currency − A Summary

Trading Currency − Morning report

Trading Currency − A Summary

Currency Markets − Morning Report

Trading Currency − A Summary

Currency Markets − Morning Report

Currency Markets − Morning Report

Currency Markets − Morning Report

Currency Markets − Afternoon Report

Trading Currency − Morning Report

Trading Currency − Morning Report

Trading Currency − A Summary Afternoon Report

Currency Markets − Morning Report

Currency Markets − Afternoon report

Currency Trading − Morning Report

Currency Trading − Afternoon Report

Currency Markets − Morning report

Currency Markets − Morning Report

Currency Markets − Afternoon Report

Trading Currency − Morning Report

Trading Currency − Morning report

Currency Markets − Afternoon Session

Currency Markets − Morning Report

Currency Markets − Afternoon Report